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What Should You Know About Meggitt PLC’s (LON:MGGT) Earnings Outlook?

The latest earnings release Meggitt PLC’s (LSE:MGGT) announced in December 2017 revealed that the business benefited from a significant tailwind, more than doubling its earnings from the prior year. Investors may find it useful to understand how market analysts view Meggitt’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. Check out our latest analysis for Meggitt

Analysts’ expectations for the coming year seems pessimistic, with earnings falling by a double-digit -51.29%. Beyond this, earnings should continue to be below today’s level, with a decline of -43.69% in 2020, eventually reaching UK£197.09M in 2021.

LSE:MGGT Future Profit Jun 8th 18
LSE:MGGT Future Profit Jun 8th 18

Although it’s helpful to understand the growth rate each year relative to today’s level, it may be more beneficial analyzing the rate at which the business is rising or falling every year, on average. The benefit of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Meggitt’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 -6.65%. This means, we can presume Meggitt will chip away at a rate of -6.65% every year for the next couple of years.

Next Steps:

For Meggitt, I’ve put together three pertinent aspects you should further research:

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  1. 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.

  2. Valuation: What is MGGT 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 MGGT is currently mispriced by the market.

  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MGGT? 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 pass 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.