In April 2019, Hilton Food Group plc (LON:HFG) released its most recent earnings announcement, which indicated that the business gained from a strong tailwind, eventuating to a double-digit earnings growth of 31%. Below is a brief commentary on my key takeaways on how market analysts perceive Hilton Food Group's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Market analysts' consensus outlook for this coming year seems rather subdued, with earnings increasing by a single digit 7.4%. The growth outlook in the following year seems much more optimistic with rates arriving at double digit 20% compared to today’s earnings, and finally hitting UK£45m by 2022.
While it is useful to be aware of the growth year by year relative to today’s value, it may be more insightful evaluating the rate at which the company is moving every year, on average. The advantage of this method is that it ignores near term flucuations and accounts for the overarching direction of Hilton Food Group's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 11%. This means that, we can anticipate Hilton Food Group will grow its earnings by 11% every year for the next couple of years.
For Hilton Food Group, I've compiled three important 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 HFG 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 HFG is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of HFG? 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.
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