In December 2018, Dalata Hotel Group plc (ISE:DHG) released its earnings update. Generally, it seems that analyst expectations are fairly bearish, with profits predicted to rise by 9.9% next year against the higher past 5-year average growth rate of 53%. Currently with trailing-twelve-month earnings of €75m, we can expect this to reach €83m by 2020. Below is a brief commentary around Dalata Hotel 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.
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Can we expect Dalata Hotel Group to keep growing?
The longer term view from the 4 analysts covering DHG 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. To get an idea of the overall earnings growth trend for DHG, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of €75m and the final forecast of €88m by 2022, the annual rate of growth for DHG’s earnings is 5.1%. This leads to an EPS of €0.47 in the final year of projections relative to the current EPS of €0.41. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 19% to 18% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Dalata Hotel Group, I've compiled three pertinent 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 Dalata Hotel 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 Dalata Hotel Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Dalata Hotel 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.