Whitbread PLC (LON:WTB): What We Can Expect From This Growth Stock

Since Whitbread PLC (LON:WTB) released its earnings in March 2018, it seems that analyst forecasts are fairly conservative, with earnings growth rate expected to be 8.49% next year, which is within range of the past five-year average earnings growth of 8.99%. Currently with earnings of UK£438.00m, we can expect this to reach UK£475.18m by 2019. 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 Whitbread

How is Whitbread going to perform in the near future?

The longer term expectations from the 20 analysts of WTB is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of WTB’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:WTB Future Profit July 13th 18
LSE:WTB Future Profit July 13th 18
By 2021, WTB’s earnings should reach UK£556.06m, from current levels of UK£438.00m, resulting in an annual growth rate of 7.80%. This leads to an EPS of £3.08 in the final year of projections relative to the current EPS of £2.4. The primary reason for earnings growth is due to reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. Margins is currently sitting at 13.29%, which is expected to expand to 14.00% by 2021.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Whitbread, I’ve put together three relevant aspects 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 Whitbread 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 Whitbread is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Whitbread? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!