Yahoo Finance Greene King plc (LON:GNK): Immense Growth Potential?
After Greene King plc's (LON:GNK) earnings announcement in October 2018, analysts seem cautiously optimistic, as a 23% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of 15%. Currently with trailing-twelve-month earnings of UK£163m, we can expect this to reach UK£200m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Greene King in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Check out our latest analysis for Greene King
Exciting times ahead?
The view from 13 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of GNK'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, GNK's earnings should reach UK£213m, from current levels of UK£163m, resulting in an annual growth rate of 3.8%. EPS reaches £0.66 in the final year of forecast compared to the current £0.52 EPS today. With a current profit margin of 7.5%, this movement will result in a margin of 9.4% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Greene King, 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 Greene King 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 Greene King is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Greene King? 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.
