Howden Joinery Group Plc (LON:HWDN): What We Can Expect From This Growth Stock
In June 2018, Howden Joinery Group Plc (LON:HWDN) released its earnings update. Generally, analyst consensus outlook appear cautiously subdued, as a 5.9% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 13%. Presently, with latest-twelve-month earnings at UK£185m, we should see this growing to UK£196m by 2019. 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.
View our latest analysis for Howden Joinery Group
Can we expect Howden Joinery Group to keep growing?
Longer term expectations from the 11 analysts covering HWDN’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 HWDN, 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 UK£185m and the final forecast of UK£229m by 2021, the annual rate of growth for HWDN’s earnings is 7.3%. This leads to an EPS of £0.37 in the final year of projections relative to the current EPS of £0.30. With a current profit margin of 13%, this movement will result in a margin of 14% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Howden Joinery Group, there are three pertinent factors 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 Howden Joinery 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 Howden Joinery Group is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Howden Joinery 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.
