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Looking at Performance Food Group Company’s (NYSE:PFGC) earnings update in December 2018, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 9.6% in the upcoming year against the higher past 5-year average growth rate of 41%. By 2020, we can expect Performance Food Group’s bottom line to reach US$218m, a jump from the current trailing-twelve-month of US$199m. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
How will Performance Food Group perform in the near future?
Longer term expectations from the 11 analysts covering PFGC’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for PFGC, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of US$199m and the final forecast of US$278m by 2022, the annual rate of growth for PFGC’s earnings is 11%. EPS reaches $2.29 in the final year of forecast compared to the current $1.95 EPS today. With a current profit margin of 1.1%, this movement will result in a margin of 1.3% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Performance Food Group, there are three pertinent factors 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 Performance Food 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 Performance Food Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Performance Food 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.