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What Are Analysts Saying About NWF Group plc's (LON:NWF) Future?

Simply Wall St

NWF Group plc's (LON:NWF) most recent earnings announcement in July 2019 showed that the company endured a significant headwind with earnings deteriorating by -13%. Below is a brief commentary on my key takeaways on how market analysts predict NWF Group's earnings growth outlook over the next few 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.

See our latest analysis for NWF Group

Market analysts' consensus outlook for the upcoming year seems rather muted, with earnings rising by a single digit 7.3%. The growth outlook in the following year seems much more positive with rates arriving at double digit 18% compared to today’s earnings and decreases to UK£7.8m by 2022.

AIM:NWF Past and Future Earnings, August 17th 2019

While it’s useful to understand the growth rate each year relative to today’s level, it may be more insightful to estimate the rate at which the earnings are moving on average every year. The benefit of this technique is that we can get a bigger picture of the direction of NWF Group's earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. 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 5.5%. This means, we can expect NWF Group will grow its earnings by 5.5% every year for the next couple of years.

Next Steps:

For NWF Group, I've compiled three fundamental aspects you should further examine:

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