Yahoo Finance Redrow plc (LON:RDW): What We Can Expect From This Growth Stock
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As Redrow plc (LON:RDW) released its earnings announcement on 31 December 2018, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 5.5% in the upcoming year relative to the higher past 5-year average growth rate of 24%. By 2020, we can expect Redrow’s bottom line to reach UK£325m, a jump from the current trailing-twelve-month of UK£308m. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
See our latest analysis for Redrow
How will Redrow perform in the near future?
Longer term expectations from the 10 analysts covering RDW’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. 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, RDW’s earnings should reach UK£346m, from current levels of UK£308m, resulting in an annual growth rate of 4.3%. This leads to an EPS of £0.98 in the final year of projections relative to the current EPS of £0.85. Margins are currently sitting at 16%, approximately the same as previous years. With analysts forecasting revenue growth of 0.13495 and RDW’s net income growth expected to roughly track that, this company may add value for shareholders over time.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Redrow, I’ve compiled three important 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 Redrow 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 Redrow is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Redrow? 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.
