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What Should We Expect From Clarkson PLC's (LON:CKN) Earnings In The Year Ahead?

Simply Wall St

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Based on Clarkson PLC's (LON:CKN) earnings update on 31 December 2018, analyst consensus outlook appear cautiously subdued, with earnings expected to grow by 12% in the upcoming year compared with the higher past 5-year average growth rate of 17%. By 2020, we can expect Clarkson’s bottom line to reach UK£33m, a jump from the current trailing-twelve-month of UK£30m. Below is a brief commentary on the longer term outlook the market has for Clarkson. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

Check out our latest analysis for Clarkson

Exciting times ahead?

The view from 4 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. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of CKN's earnings growth over these next few years.

LSE:CKN Past and Future Earnings, April 5th 2019

By 2022, CKN's earnings should reach UK£41m, from current levels of UK£30m, resulting in an annual growth rate of 10%. EPS reaches £1.34 in the final year of forecast compared to the current £0.99 EPS today. In 2022, CKN's profit margin will have expanded from 8.8% to 10%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Clarkson, I've put together three important aspects you should look at:

  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 Clarkson 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 Clarkson is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Clarkson? 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.