Yahoo Finance B&M European Value Retail S.A. (LON:BME): Poised For Long-Term Success?
The latest earnings release B&M European Value Retail S.A.'s (LON:BME) announced in May 2019 signalled that the business gained from a robust tailwind, eventuating to a double-digit earnings growth of 10%. Below, I've laid out key numbers on how market analysts perceive B&M European Value Retail's earnings growth outlook 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.
Check out our latest analysis for B&M European Value Retail
Market analysts' prospects for the coming year seems rather subdued, with earnings expanding by a single digit 5.1%. The growth outlook in the following year seems much more optimistic with rates reaching double digit 22% compared to today’s earnings, and finally hitting UK£284m by 2022.
Although it is useful to understand the growth rate year by year relative to today’s figure, it may be more beneficial estimating the rate at which the earnings are rising or falling on average every year. The advantage of this technique is that we can get a bigger picture of the direction of B&M European Value Retail's earnings trajectory over the long run, irrespective of near term fluctuations, 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 12%. This means that, we can expect B&M European Value Retail will grow its earnings by 12% every year for the next couple of years.
Next Steps:
For B&M European Value Retail, I've put together three essential aspects 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 BME 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 BME is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BME? 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 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.
