On 29 December 2018, Dunkin’ Brands Group, Inc. (NASDAQ:DNKN) announced its earnings update. Overall, analyst consensus outlook appear cautiously subdued, as a 3.4% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 19%. Currently with trailing-twelve-month earnings of US$230m, we can expect this to reach US$238m by 2020. Below is a brief commentary on the longer term outlook the market has for Dunkin’ Brands Group. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
How is Dunkin’ Brands Group going to perform in the near future?
The view from 23 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. 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 DNKN’s earnings growth over these next few years.
This results in an annual growth rate of 4.8% based on the most recent earnings level of US$230m to the final forecast of US$256m by 2022. This leads to an EPS of $3.2 in the final year of projections relative to the current EPS of $2.75. Margins are currently sitting at 17%, which is expected to expand to 18% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Dunkin’ Brands Group, I’ve put together three pertinent aspects 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 Dunkin’ Brands 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 Dunkin’ Brands Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Dunkin’ Brands 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 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.