What Should We Expect From The Weir Group PLC’s (LON:WEIR) Earnings Over The Next Year?
Looking at The Weir Group PLC’s (LON:WEIR) earnings update in June 2018, the consensus outlook from analysts appear fairly confident, as a 30% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of -27%. By 2019, we can expect Weir Group’s bottom line to reach UK£210m, a jump from the current trailing-twelve-month UK£162m. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
See our latest analysis for Weir Group
How will Weir Group perform in the near future?
Over the next three years, it seems the consensus view of the 18 analysts covering WEIR is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for WEIR, 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.
This results in an annual growth rate of 20% based on the most recent earnings level of UK£162m to the final forecast of UK£310m by 2021. EPS reaches £1.22 in the final year of forecast compared to the current £0.74 EPS today. Earnings growth appears to be a result of cost cutting activities, as revenues is expected to grow much slower than earnings. With a current profit margin of 6.9%, this movement will result in a margin of 10% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Weir Group, I’ve compiled three key 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 Weir Group 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 Weir Group is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Weir Group? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
