After La-Z-Boy Incorporated’s (NYSE:LZB) earnings announcement in July 2018, analyst forecasts seem in-line with historical trends, with earnings growth rate expected to be 9.0% in the upcoming year, relative to the past five-year average earnings growth of 8.7% per year. With trailing-twelve-month net income at current levels of US$80m, we should see this rise to US$88m in 2019. Below is a brief commentary on the longer term outlook the market has for La-Z-Boy. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
How is La-Z-Boy going to perform in the near future?
The view from 4 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of US$80m and the final forecast of US$108m by 2021, the annual rate of growth for LZB’s earnings is 11%. EPS reaches $2.56 in the final year of forecast compared to the current $1.69 EPS today. Margins are currently sitting at 5.1%, which is expected to expand to 5.6% by 2021.
Future outlook is only one aspect when you’re building an investment case for a stock. For La-Z-Boy, I’ve put together three key aspects you should further examine:
- 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 La-Z-Boy 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 La-Z-Boy is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of La-Z-Boy? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.