What Should You Know About Kingfisher plc's (LON:KGF) Future?
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After Kingfisher plc's (LON:KGF) earnings announcement in January 2019, it seems that analyst forecasts are substantially optimistic, with profits predicted to ramp up by an impressive 96% next year, against the previous 5-year average growth rate of -10%. With trailing-twelve-month net income at current levels of UK£218m, we should see this rise to UK£428m in 2020. Below is a brief commentary on the longer term outlook the market has for Kingfisher. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Check out our latest analysis for Kingfisher
How will Kingfisher perform in the near future?
The longer term expectations from the 18 analysts of KGF is tilted towards the 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.
By 2022, KGF's earnings should reach UK£534m, from current levels of UK£218m, resulting in an annual growth rate of 27%. This leads to an EPS of £0.25 in the final year of projections relative to the current EPS of £0.10. Margins are currently sitting at 1.9%, which is expected to expand to 4.6% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Kingfisher, there are three key 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 Kingfisher 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 Kingfisher is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Kingfisher? 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.