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What Should You Know About Breville Group Limited's (ASX:BRG) Earnings Trajectory?

Simply Wall St

In August 2019, Breville Group Limited (ASX:BRG) released its most recent earnings announcement, which signalled that the business benefited from a robust tailwind, leading to a double-digit earnings growth of 15%. Below, I've laid out key growth figures on how market analysts perceive Breville Group's earnings growth trajectory over the next couple of 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.

See our latest analysis for Breville Group

Market analysts' consensus outlook for next year seems optimistic, with earnings rising by a robust 12%. This growth seems to continue into the following year with rates arriving at double digit 27% compared to today’s earnings, and finally hitting AU$97m by 2022.

ASX:BRG Past and Future Earnings, August 29th 2019

Although it’s useful to understand the growth rate each year relative to today’s figure, it may be more valuable estimating the rate at which the earnings are moving on average every year. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Breville Group's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put 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 12%. This means that, we can expect Breville Group will grow its earnings by 12% every year for the next couple of years.

Next Steps:

For Breville Group, I've compiled three fundamental aspects you should further research:

  1. 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.
  2. Valuation: What is BRG 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 BRG is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BRG? 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 editorial-team@simplywallst.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.