Based on National Express Group PLC’s (LON:NEX) earnings update on 31 December 2018, analysts seem cautiously bearish, with profits predicted to rise by 8.3% next year relative to the higher past 5-year average growth rate of 19%. By 2020, we can expect National Express Group’s bottom line to reach UK£147m, a jump from the current trailing-twelve-month of UK£136m. Below is a brief commentary around National Express Group’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
Exciting times ahead?
Longer term expectations from the 5 analysts covering NEX’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of NEX’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.
From the current net income level of UK£136m and the final forecast of UK£164m by 2022, the annual rate of growth for NEX’s earnings is 6.9%. EPS reaches £0.32 in the final year of forecast compared to the current £0.27 EPS today. Margins are currently sitting at 5.5%, which is expected to expand to 6.0% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For National Express Group, there are three relevant aspects you should further research:
- 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 National Express 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 National Express Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of National Express 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 email@example.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.