The latest earnings announcement Kerry Group plc (ISE:KRZ) released in December 2018 confirmed that the company endured a minor headwind with earnings declining from €589m to €541m, a change of -8.2%. Below, I've presented key growth figures on how market analysts perceive Kerry Group's earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Check out our latest analysis for Kerry Group
Market analysts' consensus outlook for the coming year seems buoyant, with earnings climbing by a robust 14%. This growth seems to continue into the following year with rates reaching double digit 33% compared to today’s earnings, and finally hitting €785m by 2022.
Although it is helpful to be aware of the growth rate each year relative to today’s level, it may be more valuable estimating the rate at which the earnings are rising or falling every year, on average. The pro of this approach is that we can get a bigger picture of the direction of Kerry Group's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 12%. This means that, we can assume Kerry Group will grow its earnings by 12% every year for the next couple of years.
Next Steps:
For Kerry Group, I've compiled three relevant aspects you should look at:
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Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
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Valuation: What is KRZ worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether KRZ is currently mispriced by the market.
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Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of KRZ? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.