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

Simply Wall St

In March 2019, Marston's PLC (LON:MARS) released its earnings update. Generally, analysts seem cautiously optimistic, with earnings expected to grow by 21% in the upcoming year, though this is comparatively lower than the past 5-year average earnings growth of 41%. Currently with trailing-twelve-month earnings of UK£45m, we can expect this to reach UK£54m by 2020. Below is a brief commentary around Marston's's earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

See our latest analysis for Marston's

What can we expect from Marston's in the longer term?

The 12 analysts covering MARS view its longer term outlook with a positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. 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 MARS's earnings growth over these next few years.

LSE:MARS Past and Future Earnings, August 2nd 2019

This results in an annual growth rate of 6.4% based on the most recent earnings level of UK£45m to the final forecast of UK£59m by 2022. EPS reaches £0.15 in the final year of forecast compared to the current £0.071 EPS today. Margins are currently sitting at 3.9%, which is expected to expand to 4.8% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Marston's, I've put together three pertinent factors you should further research:

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