How Do Analysts See Flowers Foods, Inc. (NYSE:FLO) Performing Over The Next Few Years?

The most recent earnings update Flowers Foods, Inc.’s (NYSE:FLO) released in December 2018 signalled that the company experienced a small tailwind, eventuating to a single-digit earnings growth of 4.7%. Below is my commentary, albeit very simple and high-level, on how market analysts view Flowers Foods’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for Flowers Foods

Analysts’ outlook for next year seems optimistic, with earnings growing by a robust 27%. This growth seems to continue into the following year with rates reaching double digit 38% compared to today’s earnings, and finally hitting US$229m by 2022.

NYSE:FLO Past and Future Earnings, March 20th 2019
NYSE:FLO Past and Future Earnings, March 20th 2019

Although it’s helpful to understand the growth each year relative to today’s figure, it may be more valuable to analyze the rate at which the earnings are rising or falling on average every year. The advantage of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Flowers Foods’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 analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 12%. This means, we can assume Flowers Foods will grow its earnings by 12% every year for the next few years.

Next Steps:

For Flowers Foods, I’ve put together three fundamental aspects you should look at:

  1. 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.
  2. Valuation: What is FLO 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 FLO is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of FLO? 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 editorial-team@simplywallst.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.