Yahoo Finance How Do Analysts See Derwent London Plc (LON:DLN) Performing Over The Next Few Years?
In December 2018, Derwent London Plc (LON:DLN) announced its most recent earnings update, which confirmed that the business experienced a major headwind with earnings declining by -29%. Below is a brief commentary on my key takeaways on how market analysts predict Derwent London’s earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Derwent London
Analysts’ outlook for the coming year seems rather muted, with earnings rising by a single digit 9.7%. The following year doesn’t look much more exciting, though earnings does reach UK£269m in 2022.
Although it is helpful to be aware of the rate of growth year by year relative to today’s figure, it may be more valuable analyzing the rate at which the company is rising or falling every year, on average. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of Derwent London’s earnings trajectory over time, be more volatile. To calculate this rate, I’ve inserted 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 7.6%. This means that, we can expect Derwent London will grow its earnings by 7.6% every year for the next couple of years.
Next Steps:
For Derwent London, there are three pertinent 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 DLN 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 DLN is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of DLN? 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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