What Should We Expect From Howden Joinery Group Plc’s (LON:HWDN) Earnings Over The Next Year?

In December 2017, Howden Joinery Group Plc (LSE:HWDN) announced its latest earnings update. Overall, analyst consensus outlook appear cautiously subdued, with earnings expected to grow by 5.53% in the upcoming year relative to the higher past 5-year average growth rate of 15.84%. By 2019, we can expect Howden Joinery Group’s bottom line to reach UK£195.23M, a jump from the current UK£185.00M. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Howden Joinery Group in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here. Check out our latest analysis for Howden Joinery Group

Can we expect Howden Joinery Group to keep growing?

Longer term expectations from the 14 analysts covering HWDN’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of HWDN’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
LSE:HWDN Future Profit Mar 7th 18
LSE:HWDN Future Profit Mar 7th 18
By 2021, HWDN’s earnings should reach UK£219.61M, from current levels of UK£185.00M, resulting in an annual growth rate of 6.00%. This leads to an EPS of £0.37 in the final year of projections relative to the current EPS of £0.3. The primary reason for earnings growth is due to cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. In 2021, HWDN’s profit margin will have expanded from 13.18% to 13.38%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Howden Joinery Group, I’ve compiled three essential aspects you should further research:

  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 Howden Joinery 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 Howden Joinery Group is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Howden Joinery 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!