What Are Analysts Saying About Barclays PLC’s (LON:BARC) Future?
The latest earnings announcement Barclays PLC’s (LSE:BARC) released in December 2017 showed that the company endured a major headwind with earnings deteriorating by -62.42%. Below, I’ve laid out key growth figures on how market analysts perceive Barclays’s earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for Barclays
Analysts’ expectations for the coming year seems buoyant, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally generating UK£4.23B in 2021.
While it’s informative knowing the rate of growth year by year relative to today’s value, it may be more insightful to evaluate the rate at which the earnings are rising or falling on average every year. The pro of this method is that we can get a bigger picture of the direction of Barclays’s earnings trajectory over the long run, irrespective of near term fluctuations, 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 41.55%. This means that, we can anticipate Barclays will grow its earnings by 41.55% every year for the next few years.
Next Steps:
For Barclays, there are three key factors 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 BARC 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 BARC is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BARC? 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 pass 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.
