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Based on Kerry Group plc’s (ISE:KRZ) earnings update in December 2018, it seems that analyst expectations are fairly bearish, as a 14% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 17%. By 2020, we can expect Kerry Group’s bottom line to reach €616m, a jump from the current trailing-twelve-month of €541m. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Kerry Group in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Can we expect Kerry Group to keep growing?
The view from 13 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly 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 KRZ’s earnings growth over these next few years.
By 2022, KRZ’s earnings should reach €790m, from current levels of €541m, resulting in an annual growth rate of 11%. This leads to an EPS of €4.56 in the final year of projections relative to the current EPS of €3.06. In 2022, KRZ’s profit margin will have expanded from 8.2% to 10.0%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Kerry Group, I’ve compiled three important factors you should look at:
- 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 Kerry 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 Kerry Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Kerry 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.