Bunzl plc (LON:BNZL): What Can We Expect From This High Growth Stock?
Bunzl plc’s (LSE:BNZL) released its most recent earnings update in December 2017, which confirmed that the company experienced a strong tailwind, leading to a double-digit earnings growth of 16.77%. Below, I’ve laid out key numbers on how market analysts view Bunzl’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for Bunzl
Analysts’ expectations for the coming year seems rather subdued, with earnings growing by a single digit 2.86%. The following year doesn’t look much more exciting, though earnings does reach UK£345.80M in 2021.
While it’s helpful to understand the growth rate each year relative to today’s level, it may be more beneficial determining the rate at which the business is rising or falling every year, on average. The advantage of this technique is that we can get a bigger picture of the direction of Bunzl’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 3.73%. This means, we can presume Bunzl will grow its earnings by 3.73% every year for the next few years.
Next Steps:
For Bunzl, I’ve compiled three relevant 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 BNZL 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 BNZL is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BNZL? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
