Yahoo Finance Greggs plc (LON:GRG): What Are The Future Prospects?
In December 2018, Greggs plc (LON:GRG) announced its earnings update. Overall, analysts seem cautiously optimistic, as a 29% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 15%. Currently with trailing-twelve-month earnings of UK£66m, we can expect this to reach UK£85m by 2020. Below is a brief commentary around Greggs's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
View our latest analysis for Greggs
How will Greggs perform in the near future?
The longer term view from the 8 analysts covering GRG is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of GRG'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.
From the current net income level of UK£66m and the final forecast of UK£101m by 2022, the annual rate of growth for GRG’s earnings is 14%. This leads to an EPS of £1 in the final year of projections relative to the current EPS of £0.65. With a current profit margin of 6.4%, this movement will result in a margin of 7.8% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Greggs, there are three important 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 Greggs 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 Greggs is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Greggs? 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.
