Yahoo Finance Will NEXT plc's (LON:NXT) Earnings Grow In The Next Couple Of Years?
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NEXT plc's (LON:NXT) most recent earnings announcement in January 2019 suggested that the business faced a slight headwind with earnings falling from UK£592m to UK£590m, a change of -0.2%. Below, I've laid out key growth figures on how market analysts perceive NEXT's earnings growth outlook over the next couple of years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
View our latest analysis for NEXT
Market analysts' prospects for this coming year seems pessimistic, with earnings reducing by -0.7%. Beyond this, earnings are expected to continue to be below today's level, with a reduction of -0.7% in 2021, eventually reaching UK£586m in 2022.
Even though it’s useful to understand the growth year by year relative to today’s figure, it may be more insightful gauging the rate at which the earnings are moving on average every year. The pro of this technique is that we can get a better picture of the direction of NEXT's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I've appended 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 -5.2%. This means, we can anticipate NEXT will chip away at a rate of -5.2% every year for the next couple of years.
Next Steps:
For NEXT, there are three essential factors 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 NXT 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 NXT is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of NXT? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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.
