Yahoo Finance What Should You Know About SEGRO Plc's (LON:SGRO) Future?
Based on SEGRO Plc's (LON:SGRO) earnings update in December 2018, analyst forecasts appear to be pessimistic, as a 14% fall in profits is expected in the upcoming year compared with the past 5-year average growth rate of 19%. With trailing-twelve-month net income at current levels of UK£1.1b, the consensus growth rate suggests that earnings will decline to UK£919m by 2020. Below is a brief commentary around SEGRO's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
See our latest analysis for SEGRO
What can we expect from SEGRO in the longer term?
The view from 11 analysts over the next three years is one of negative sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of SGRO's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, SGRO's earnings should reach UK£741m, from current levels of UK£1.1b, resulting in an annual growth rate of -13%. EPS reaches £0.65 in the final year of forecast compared to the current £1.05 EPS today. Contraction in the bottom line seems to suggest cost growth exceeding top-line growth of 9.6% in the next three years. With this high cost growth, margins is expected to contract from 310% to 159% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For SEGRO, I've put together three important 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 SEGRO 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 SEGRO is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of SEGRO? 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.
