On 30 June 2019, Beacon Lighting Group Limited (ASX:BLX) announced its earnings update. Overall, analyst forecasts seem fairly subdued, with profits predicted to rise by 2.5% next year against the higher past 5-year average growth rate of 5.3%. By 2020, we can expect Beacon Lighting Group’s bottom line to reach AU$16m, a jump from the current trailing-twelve-month of AU$16m. Below is a brief commentary around Beacon Lighting Group's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect Beacon Lighting Group to keep growing?
The view from 2 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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 BLX's earnings growth over these next few years.
This results in an annual growth rate of 5.1% based on the most recent earnings level of AU$16m to the final forecast of AU$18m by 2022. EPS reaches A$0.084 in the final year of forecast compared to the current A$0.074 EPS today. However, the expansion of the current 6.5% margin is not expected to be sustained, as it begins to contract to 6.4% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Beacon Lighting Group, I've compiled three important factors you should further examine:
- 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 Beacon Lighting Group 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 Beacon Lighting Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Beacon Lighting Group? 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.