Based on Flowers Foods, Inc.'s (NYSE:FLO) earnings update in December 2018, analyst consensus outlook appear cautiously optimistic, with profits predicted to increase by 27% next year compared with the past 5-year average growth rate of -5.6%. Presently, with latest-twelve-month earnings at US$157m, we should see this growing to US$200m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
What can we expect from Flowers Foods in the longer term?
The 6 analysts covering FLO view its longer term outlook with a positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of FLO's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of US$157m and the final forecast of US$230m by 2022, the annual rate of growth for FLO’s earnings is 12%. This leads to an EPS of $1.09 in the final year of projections relative to the current EPS of $0.74. Margins are currently sitting at 4.0%, which is expected to expand to 5.4% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Flowers Foods, there are three pertinent aspects you should further examine:
- 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 Flowers Foods 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 Flowers Foods is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Flowers Foods? 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 email@example.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.