Yahoo Finance Electrocomponents plc (LON:ECM): What Are The Future Prospects?
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Looking at Electrocomponents plc's (LON:ECM) earnings update on 31 March 2019, analysts seem cautiously bearish, with profits predicted to rise by 14% next year relative to the higher past 5-year average growth rate of 24%. With trailing-twelve-month net income at current levels of UK£148m, we should see this rise to UK£169m in 2020. Below is a brief commentary around Electrocomponents's earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
See our latest analysis for Electrocomponents
What can we expect from Electrocomponents in the longer term?
The longer term view from the 10 analysts covering ECM is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of ECM's earnings growth over these next few years.
By 2022, ECM's earnings should reach UK£201m, from current levels of UK£148m, resulting in an annual growth rate of 9.8%. This leads to an EPS of £0.45 in the final year of projections relative to the current EPS of £0.33. Margins are currently sitting at 7.9%, which is expected to expand to 9.3% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Electrocomponents, I've compiled three pertinent aspects 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 Electrocomponents 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 Electrocomponents is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Electrocomponents? 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.
