Yahoo Finance IMI plc (LON:IMI): What Does The Future Look Like?
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After IMI plc's (LON:IMI) recent earnings announcement in December 2018, analyst consensus outlook seem pessimistic, with earnings expected to decline by 4.4% in the upcoming year. However, this is still an improvement on its past 5-year earnings growth rate of -5.8%, on average. Presently, with latest-twelve-month earnings at UK£169m, we should see this fall to UK£162m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for IMI in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
See our latest analysis for IMI
Exciting times ahead?
The longer term view from the 17 analysts covering IMI 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 reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of UK£169m and the final forecast of UK£185m by 2022, the annual rate of growth for IMI’s earnings is 3.2%. This leads to an EPS of £0.71 in the final year of projections relative to the current EPS of £0.63. Margins are currently sitting at 8.9%, which is expected to expand to 9.2% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For IMI, I've put together three fundamental factors 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 IMI 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 IMI is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of IMI? 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.
