Yahoo Finance Intertek Group plc (LON:ITRK): What Can We Expect From This High Growth Stock?
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Intertek Group plc's (LON:ITRK) latest earnings update in March 2019 indicated that the business faced a minor headwind with earnings declining from UK£287m to UK£284m, a change of -1.0%. Today I want to provide a brief commentary on how market analysts perceive Intertek Group's earnings growth trajectory over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Intertek Group
Market analysts' prospects for the coming year seems optimistic, with earnings expanding by a robust 12%. This growth seems to continue into the following year with rates reaching double digit 20% compared to today’s earnings, and finally hitting UK£368m by 2022.
While it’s helpful to understand the rate of growth each year relative to today’s level, it may be more beneficial to gauge the rate at which the company is growing every year, on average. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Intertek Group's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 8.4%. This means, we can assume Intertek Group will grow its earnings by 8.4% every year for the next few years.
Next Steps:
For Intertek Group, I've put together three essential factors 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 ITRK 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 ITRK is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ITRK? 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.
