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Looking at Midwich Group Plc's (LON:MIDW) earnings update on 31 December 2018, analysts seem cautiously optimistic, with profits predicted to increase by 41% next year against the past 5-year average growth rate of 28%. Currently with trailing-twelve-month earnings of UK£15m, we can expect this to reach UK£21m by 2020. Below is a brief commentary on the longer term outlook the market has for Midwich Group. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
View our latest analysis for Midwich Group
What can we expect from Midwich Group in the longer term?
The longer term expectations from the 4 analysts of MIDW is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for MIDW, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 17% based on the most recent earnings level of UK£15m to the final forecast of UK£26m by 2022. This leads to an EPS of £0.30 in the final year of projections relative to the current EPS of £0.19. In 2022, MIDW's profit margin will have expanded from 2.6% to 3.4%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Midwich Group, I've put together three important 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 Midwich Group 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 Midwich Group 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 Midwich Group? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.