What Should Investors Know About The Future Of Henry Boot PLC’s (LON:BOOT)?

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The most recent earnings announcement Henry Boot PLC’s (LON:BOOT) released in December 2018 indicated that the company experienced a substantial headwind with earnings falling by -11%. Today I want to provide a brief commentary on how market analysts view Henry Boot’s earnings growth trajectory over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

See our latest analysis for Henry Boot

Analysts’ expectations for the upcoming year seems rather subdued, with earnings rising by a single digit 2.7%. The following year doesn’t look much more exciting, though earnings does reach UK£44m in 2022.

LSE:BOOT Past and Future Earnings, June 13th 2019
LSE:BOOT Past and Future Earnings, June 13th 2019

Even though it’s useful to understand the growth rate each year relative to today’s figure, it may be more valuable gauging the rate at which the business is rising or falling every year, on average. The pro of this technique is that it ignores near term flucuations and accounts for the overarching direction of Henry Boot’s earnings trajectory over time, which may be more relevant for long term investors. To compute 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 4.2%. This means that, we can anticipate Henry Boot will grow its earnings by 4.2% every year for the next couple of years.

Next Steps:

For Henry Boot, I’ve put together three essential 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 BOOT 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 BOOT is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BOOT? 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.