Since Victrex plc (LON:VCT) released its earnings in September 2018, analysts seem cautiously bearish, as a -2.1% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 8.3%. By 2020, we can expect Victrex’s bottom line to reach UK£108m, a jump from the current trailing-twelve-month of UK£111m. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
How will Victrex perform in the near future?
Longer term expectations from the 14 analysts covering VCT’s stock is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. 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 VCT's earnings growth over these next few years.
By 2022, VCT's earnings should reach UK£119m, from current levels of UK£111m, resulting in an annual growth rate of 2.5%. EPS reaches £1.36 in the final year of forecast compared to the current £1.29 EPS today. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 34% to 33% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Victrex, I've compiled three important 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 Victrex 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 Victrex is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Victrex? 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 email@example.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.