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What Do Analysts Think About The Future Of NMC Health Plc's (LON:NMC)?

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Looking at NMC Health Plc's (LON:NMC) earnings update in December 2018, analyst consensus outlook appear cautiously optimistic, with earnings growth rate expected to be 28% next year, which is within range of the past five-year average earnings growth of 28%. By 2020, we can expect NMC Health’s bottom line to reach US$319m, a jump from the current trailing-twelve-month of US$249m. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

See our latest analysis for NMC Health

How will NMC Health perform in the near future?

The longer term view from the 10 analysts covering NMC 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 NMC, 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.

LSE:NMC Past and Future Earnings, June 30th 2019
LSE:NMC Past and Future Earnings, June 30th 2019

From the current net income level of US$249m and the final forecast of US$472m by 2022, the annual rate of growth for NMC’s earnings is 18%. This leads to an EPS of $2.28 in the final year of projections relative to the current EPS of $1.2. With a current profit margin of 12%, this movement will result in a margin of 15% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For NMC Health, there are three relevant 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 NMC Health 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 NMC Health is currently mispriced by the market.

  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of NMC Health? 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.