Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Since Lincoln Electric Holdings, Inc. (NASDAQ:LECO) released its earnings in March 2019, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 13% next year relative to the past 5-year average growth rate of 1.8%. By 2020, we can expect Lincoln Electric Holdings’s bottom line to reach US$323m, a jump from the current trailing-twelve-month of US$287m. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Lincoln Electric Holdings in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Can we expect Lincoln Electric Holdings to keep growing?
The longer term view from the 11 analysts covering LECO 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 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 US$287m and the final forecast of US$375m by 2022, the annual rate of growth for LECO’s earnings is 7.7%. This leads to an EPS of $6.18 in the final year of projections relative to the current EPS of $4.42. Margins are currently sitting at 9.5%, which is expected to expand to 11% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Lincoln Electric Holdings, I've put together three essential 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 Lincoln Electric Holdings 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 Lincoln Electric Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Lincoln Electric Holdings? 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 firstname.lastname@example.org. 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.