Looking at Breville Group Limited's (ASX:BRG) earnings update on 30 June 2019, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 16% next year relative to the past 5-year average growth rate of 7.6%. Presently, with latest-twelve-month earnings at AU$67m, we should see this growing to AU$78m by 2020. Below is a brief commentary around Breville Group's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Exciting times ahead?
The view from 6 analysts over the next three years is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. 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 AU$67m and the final forecast of AU$100m by 2022, the annual rate of growth for BRG’s earnings is 13%. EPS reaches A$0.77 in the final year of forecast compared to the current A$0.52 EPS today. With a current profit margin of 8.9%, this movement will result in a margin of 9.7% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Breville Group, I've compiled three pertinent aspects you should further research:
- 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 Breville 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 Breville Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Breville 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.