Yahoo Finance Will Devro plc's (LON:DVO) Earnings Grow In The Next 12 Months?
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In December 2018, Devro plc (LON:DVO) announced its earnings update. Overall, analysts seem highly optimistic, as a 95% rise in profits is expected in the upcoming year, against the historical 5-year average growth rate of -13%. Presently, with latest-twelve-month earnings at UK£13m, we should see this growing to UK£24m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Devro in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
View our latest analysis for Devro
What can we expect from Devro in the longer term?
Over the next three years, it seems the consensus view of the 6 analysts covering DVO is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of DVO'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, DVO's earnings should reach UK£29m, from current levels of UK£13m, resulting in an annual growth rate of 23%. This leads to an EPS of £0.17 in the final year of projections relative to the current EPS of £0.075. Margins are currently sitting at 4.9%, which is expected to expand to 10% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Devro, I've compiled three relevant factors you should look at:
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 Devro 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 Devro is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Devro? 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.
