After US Foods Holding Corp.'s (NYSE:USFD) earnings announcement on 30 March 2019, analyst consensus outlook appear cautiously subdued, with earnings expected to grow by 12% in the upcoming year against the higher past 5-year average growth rate of 44%. Currently with trailing-twelve-month earnings of US$407m, we can expect this to reach US$457m by 2020. Below is a brief commentary around US Foods Holding's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
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Exciting times ahead?
Longer term expectations from the 12 analysts covering USFD’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for USFD, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of US$407m and the final forecast of US$557m by 2022, the annual rate of growth for USFD’s earnings is 9.0%. This leads to an EPS of $2.64 in the final year of projections relative to the current EPS of $1.88. With a current profit margin of 1.7%, this movement will result in a margin of 2.0% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For US Foods Holding, there are three essential aspects 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 US Foods Holding 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 US Foods Holding is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of US Foods Holding? 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.