Yahoo Finance What Do Analysts Think About Rotork plc's (LON:ROR) Future?
In December 2018, Rotork plc (LON:ROR) released its latest earnings announcement, which suggested that the business benefited from a strong tailwind, eventuating to a high double-digit earnings growth of 65%. Below, I've laid out key growth figures on how market analysts view Rotork's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Rotork
Market analysts' consensus outlook for the coming year seems rather muted, with earnings climbing by a single digit 1.6%. The growth outlook in the following year seems much more positive with rates generating double digit 16% compared to today’s earnings, and finally hitting UK£116m by 2022.
Although it’s informative knowing the growth rate each year relative to today’s figure, it may be more valuable to gauge the rate at which the company is rising or falling on average every year. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of Rotork's earnings trajectory over time, which may be more relevant for long term investors. To calculate 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 8.9%. This means that, we can assume Rotork will grow its earnings by 8.9% every year for the next couple of years.
Next Steps:
For Rotork, there are three important 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 ROR 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 ROR is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ROR? 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.
