Yahoo Finance What Should Investors Know About PZ Cussons Plc’s (LON:PZC) Future?
In May 2018, PZ Cussons Plc (LON:PZC) released its most recent earnings announcement, which confirmed that the company faced a immense headwind with earnings deteriorating by -24%. Below, I’ve laid out key numbers on how market analysts perceive PZ Cussons’s earnings growth trajectory over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
View our latest analysis for PZ Cussons
Market analysts’ consensus outlook for this coming year seems optimistic, with earnings rising by a robust 20%. This growth seems to continue into the following year with rates arriving at double digit 30% compared to today’s earnings, and finally hitting UK£66m by 2021.
Even though it is informative knowing the rate of growth each year relative to today’s level, it may be more valuable evaluating the rate at which the earnings are rising or falling on average every year. The pro of this approach is that we can get a bigger picture of the direction of PZ Cussons’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve appended 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 10%. This means that, we can assume PZ Cussons will grow its earnings by 10% every year for the next few years.
Next Steps:
For PZ Cussons, I’ve compiled three key aspects 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 PZC 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 PZC is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of PZC? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
