Yahoo Finance What Should You Know About Close Brothers Group plc’s (LON:CBG) Growth?
Looking at Close Brothers Group plc’s (LON:CBG) earnings update in July 2018, the consensus outlook from analysts appear somewhat bearish, with profits predicted to rise by 0.5% next year against the higher past 5-year average growth rate of 10%. By 2019, we can expect Close Brothers Group’s bottom line to reach UK£206m, a jump from the current trailing-twelve-month UK£205m. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
See our latest analysis for Close Brothers Group
How is Close Brothers Group going to perform in the near future?
The 8 analysts covering CBG view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of CBG’s earnings growth over these next few years.
This results in an annual growth rate of 1.8% based on the most recent earnings level of UK£205m to the final forecast of UK£215m by 2021. EPS reaches £1.44 in the final year of forecast compared to the current £1.36 EPS today. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 25% to 23% by the end of 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Close Brothers Group, there are three relevant aspects you should look at:
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 Close Brothers Group 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 Close Brothers Group is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Close Brothers Group? 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.
