Yahoo Finance What Are Analysts Saying About The Future Of AJ Bell PLC's (LON:AJB)?
The latest earnings release AJ Bell PLC's (LON:AJB) announced in September 2018 signalled that the company benefited from a robust tailwind, leading to a double-digit earnings growth of 29%. Below is a brief commentary on my key takeaways on how market analysts view AJ Bell'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.
Check out our latest analysis for AJ Bell
Market analysts' prospects for the upcoming year seems buoyant, with earnings climbing by a robust 35%. This growth seems to continue into the following year with rates arriving at double digit 67% compared to today’s earnings, and finally hitting UK£44m by 2022.
Although it’s helpful to be aware of the growth each year relative to today’s figure, it may be more valuable analyzing the rate at which the company is moving on average every year. The benefit of this technique is that we can get a better picture of the direction of AJ Bell's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute 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 19%. This means, we can anticipate AJ Bell will grow its earnings by 19% every year for the next couple of years.
Next Steps:
For AJ Bell, there are three relevant aspects you should further research:
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 AJB 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 AJB is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AJB? 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.
