After Taylor Wimpey plc’s (LON:TW.) earnings announcement on 31 December 2018, the consensus outlook from analysts appear somewhat bearish, with profits predicted to rise by 4.1% next year relative to the higher past 5-year average growth rate of 16%. Presently, with latest-twelve-month earnings at UK£657m, we should see this growing to UK£683m by 2020. Below is a brief commentary on the longer term outlook the market has for Taylor Wimpey. For those interested in more of an analysis of the company, you can research its fundamentals here.
How will Taylor Wimpey perform in the near future?
The longer term expectations from the 11 analysts of TW. is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of TW.’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, TW.’s earnings should reach UK£758m, from current levels of UK£657m, resulting in an annual growth rate of 4.2%. EPS reaches £0.23 in the final year of forecast compared to the current £0.20 EPS today. Margins are currently sitting at 16%, which is expected to expand to 17% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Taylor Wimpey, there are three essential 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 Taylor Wimpey 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 Taylor Wimpey is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Taylor Wimpey? 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 email@example.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.