Yahoo Finance J D Wetherspoon plc (LON:JDW): Poised For Long Term Success?
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Based on J D Wetherspoon plc’s (LON:JDW) earnings update in July 2018, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 18% next year compared with the past 5-year average growth rate of 9.1%. Presently, with latest-twelve-month earnings at UK£67m, we should see this growing to UK£78m by 2020. Below is a brief commentary on the longer term outlook the market has for J D Wetherspoon. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
View our latest analysis for J D Wetherspoon
How is J D Wetherspoon going to perform in the near future?
Longer term expectations from the 12 analysts covering JDW’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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.
This results in an annual growth rate of 6.8% based on the most recent earnings level of UK£67m to the final forecast of UK£85m by 2022. This leads to an EPS of £0.80 in the final year of projections relative to the current EPS of £0.65. In 2022, JDW’s profit margin will have expanded from 3.9% to 4.5%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For J D Wetherspoon, 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 J D Wetherspoon 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 J D Wetherspoon is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of J D Wetherspoon? 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.
