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What Should You Know About The Future Of Crest Nicholson Holdings plc's (LON:CRST)?

Simply Wall St

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On 30 April 2019, Crest Nicholson Holdings plc (LON:CRST) announced its latest earnings update. Overall, the consensus outlook from analysts appear bearish, with profits predicted to drop by 8.1% next year against the past 5-year average growth rate of 9.7%. Presently, with latest-twelve-month earnings at UK£143m, we should see this fall to UK£131m by 2020. Below is a brief commentary on the longer term outlook the market has for Crest Nicholson Holdings. For those interested in more of an analysis of the company, you can research its fundamentals here.

View our latest analysis for Crest Nicholson Holdings

Exciting times ahead?

The view from 10 analysts over the next three years 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 CRST, 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.

LSE:CRST Past and Future Earnings, June 17th 2019

This results in an annual growth rate of 1.6% based on the most recent earnings level of UK£143m to the final forecast of UK£143m by 2022. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of £0.52 in the final year of forecast compared to the current £0.56 EPS today. Margins are currently sitting at 13%, which is expected to expand to 13% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Crest Nicholson Holdings, I've compiled three key aspects you should further examine:

  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 Crest Nicholson Holdings 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 Crest Nicholson Holdings is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Crest Nicholson Holdings? 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.