Yahoo Finance Will Wincanton plc’s (LON:WIN) Earnings Grow In The Years Ahead?
Wincanton plc’s (LON:WIN) announced its latest earnings update in March 2018, which revealed that the company faced a substantial headwind with earnings deteriorating by -26%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Wincanton’s earnings growth trajectory over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
View our latest analysis for Wincanton
Analysts’ outlook for this coming year seems buoyant, with earnings growing by a robust 26%. This growth seems to continue into the following year with rates arriving at double digit 31% compared to today’s earnings, and finally hitting UK£42m by 2021.
Although it is informative knowing the growth year by year relative to today’s value, it may be more valuable estimating the rate at which the company is rising or falling on average every year. The advantage of this method is that we can get a better picture of the direction of Wincanton’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate 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 7.9%. This means that, we can assume Wincanton will grow its earnings by 7.9% every year for the next couple of years.
Next Steps:
For Wincanton, I’ve put together three pertinent factors 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 WIN 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 WIN is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of WIN? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
