Yahoo Finance Rathbone Brothers Plc (LON:RAT): Is It A Smart Long Term Opportunity?
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After Rathbone Brothers Plc's (LON:RAT) earnings announcement in December 2018, analysts seem cautiously optimistic, as a 21% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 7.6%. With trailing-twelve-month net income at current levels of UK£46m, we should see this rise to UK£56m in 2020. Below is a brief commentary on the longer term outlook the market has for Rathbone Brothers. For those interested in more of an analysis of the company, you can research its fundamentals here.
View our latest analysis for Rathbone Brothers
How will Rathbone Brothers perform in the near future?
The longer term view from the 7 analysts covering RAT is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. 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.
From the current net income level of UK£46m and the final forecast of UK£71m by 2022, the annual rate of growth for RAT’s earnings is 14%. EPS reaches £1.35 in the final year of forecast compared to the current £0.89 EPS today. In 2022, RAT's profit margin will have expanded from 14% to 19%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Rathbone Brothers, I've compiled three fundamental aspects 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 Rathbone Brothers 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 Rathbone Brothers is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Rathbone Brothers? 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.
