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CC Group plc (ISE:GCC): What Does The Future Look Like?

Simply Wall St

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C&C Group plc's (ISE:GCC) latest earnings announcement in June 2019 revealed that the business endured a minor headwind with earnings declining from €80m to €72m, a change of -9.2%. Today I want to provide a brief commentary on how market analysts perceive C&C Group's earnings growth outlook over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for C&C Group

Analysts' expectations for the upcoming year seems buoyant, with earnings rising by a robust 24%. This growth seems to continue into the following year with rates arriving at double digit 30% compared to today’s earnings, and finally hitting €101m by 2022.

ISE:GCC Past and Future Earnings, June 19th 2019

Although it’s helpful to be aware of the rate of growth year by year relative to today’s value, it may be more insightful evaluating the rate at which the earnings are growing on average every year. The advantage of this method is that we can get a bigger picture of the direction of C&C Group's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've inserted 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 10%. This means, we can presume C&C Group will grow its earnings by 10% every year for the next few years.

Next Steps:

For C&C Group, I've compiled three essential 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 GCC 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 GCC is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of GCC? 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.