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What Are Analysts Saying About Charles River Laboratories International, Inc.’s (NYSE:CRL) Growth?

Jason Fuller

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The latest earnings announcement Charles River Laboratories International, Inc. (NYSE:CRL) released in December 2018 revealed that the company gained from a sizeable tailwind, eventuating to a high double-digit earnings growth of 82%. Below, I’ve laid out key growth figures on how market analysts perceive Charles River Laboratories International’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

View our latest analysis for Charles River Laboratories International

Market analysts’ consensus outlook for this coming year seems buoyant, with earnings increasing by a robust 14%. This growth seems to continue into the following year with rates arriving at double digit 34% compared to today’s earnings, and finally hitting US$343m by 2022.

NYSE:CRL Past and Future Earnings, February 23rd 2019

While it’s helpful to understand the growth each year relative to today’s value, it may be more beneficial to determine the rate at which the earnings are rising or falling every year, on average. The pro of this approach is that we can get a bigger picture of the direction of Charles River Laboratories International’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 put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 14%. This means that, we can assume Charles River Laboratories International will grow its earnings by 14% every year for the next few years.

Next Steps:

For Charles River Laboratories International, there are three essential aspects you should further research:

  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 CRL 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 CRL is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CRL? 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.