Yahoo Finance Aggreko Plc (LON:AGK): What's The Analyst Consensus Outlook?
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The most recent earnings announcement Aggreko Plc's (LON:AGK) released in March 2019 suggested that the business gained from a strong tailwind, leading to a double-digit earnings growth of 23%. Below, I've laid out key growth figures on how market analysts predict Aggreko's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for Aggreko
Analysts' expectations for this coming year seems rather subdued, with earnings climbing by a single digit 3.8%. The growth outlook in the following year seems much more positive with rates arriving at double digit 25% compared to today’s earnings and reduces to UK£141m by 2022.
Even though it’s useful to be aware of the rate of growth each year relative to today’s level, it may be more beneficial evaluating the rate at which the earnings are growing on average every year. The benefit of this technique is that it ignores near term flucuations and accounts for the overarching direction of Aggreko's earnings trajectory over time, be more volatile. To calculate this rate, I put 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 5.9%. This means that, we can assume Aggreko will grow its earnings by 5.9% every year for the next couple of years.
Next Steps:
For Aggreko, I've compiled three key factors you should further examine:
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.
Valuation: What is AGK 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 AGK is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AGK? 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.
