After Barclays PLC's (LON:BARC) earnings announcement on 31 March 2019, the consensus outlook from analysts appear somewhat bearish, with profits predicted to rise by 11% next year relative to the higher past 5-year average growth rate of 25%. Presently, with latest-twelve-month earnings at UK£1.6b, we should see this growing to UK£1.8b by 2020. Below is a brief commentary on the longer term outlook the market has for Barclays. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Can we expect Barclays to keep growing?
Longer term expectations from the 20 analysts covering BARC’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of UK£1.6b and the final forecast of UK£2.0b by 2022, the annual rate of growth for BARC’s earnings is 6.6%. This leads to an EPS of £0.26 in the final year of projections relative to the current EPS of £0.094. In 2022, BARC's profit margin will have expanded from 8.1% to 8.7%.
Future outlook is only one aspect when you're building an investment case for a stock. For Barclays, I've put together three pertinent aspects 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 Barclays 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 Barclays is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Barclays? 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.