C&C Group plc (ISE:GCC): Will The Growth Last?

Looking at C&C Group plc’s (ISE:GCC) earnings update in February 2019, analyst consensus outlook appear cautiously optimistic, with profits predicted to increase by 24% next year compared with the past 5-year average growth rate of 8.8%. Currently with trailing-twelve-month earnings of €72m, we can expect this to reach €90m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for C&C Group in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

View our latest analysis for C&C Group

How will C&C Group perform in the near future?

Over the next three years, it seems the consensus view of the 5 analysts covering GCC is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of GCC’s earnings growth over these next few years.

ISE:GCC Past and Future Earnings, August 12th 2019
ISE:GCC Past and Future Earnings, August 12th 2019

From the current net income level of €72m and the final forecast of €99m by 2022, the annual rate of growth for GCC’s earnings is 9.6%. EPS reaches €0.33 in the final year of forecast compared to the current €0.23 EPS today. Margins are currently sitting at 4.6%, which is expected to expand to 5.8% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For C&C Group, I’ve put together three pertinent factors you should further examine:

  1. 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.
  2. Valuation: What is C&C Group 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 C&C Group is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of C&C Group? 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.