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John Bean Technologies Corporation’s (NYSE:JBT) latest earnings announcement in December 2018 suggested that the business gained from a robust tailwind, eventuating to a double-digit earnings growth of 27%. Below is my commentary, albeit very simple and high-level, on how market analysts view John Bean Technologies’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Analysts’ expectations for next year seems positive, with earnings climbing by a robust 23%. This growth seems to continue into the following year with rates reaching double digit 46% compared to today’s earnings, and finally hitting US$175m by 2022.
Although it’s helpful to be aware of the growth each year relative to today’s level, it may be more beneficial evaluating the rate at which the business is growing on average every year. The benefit of this technique is that it ignores near term flucuations and accounts for the overarching direction of John Bean Technologies’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve inserted 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 17%. This means, we can presume John Bean Technologies will grow its earnings by 17% every year for the next few years.
For John Bean Technologies, I’ve put together three relevant factors 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 JBT 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 JBT is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of JBT? 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 firstname.lastname@example.org. 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.