Looking at Vesuvius plc’s (LON:VSVS) earnings update in June 2018, analysts seem extremely confident, as a 90% rise in profits is expected in the upcoming year, compared with the past 5-year average growth rate of -8.6%. By 2019, we can expect Vesuvius’s bottom line to reach UK£69m, a jump from the current trailing-twelve-month UK£36m. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Vesuvius in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
How will Vesuvius perform in the near future?
The 13 analysts covering VSVS 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. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of VSVS’s earnings growth over these next few years.
From the current net income level of UK£36m and the final forecast of UK£83m by 2021, the annual rate of growth for VSVS’s earnings is 12%. EPS reaches £0.53 in the final year of forecast compared to the current £0.13 EPS today. Margins are currently sitting at 2.2%, which is expected to expand to 4.5% by 2021.
Future outlook is only one aspect when you’re building an investment case for a stock. For Vesuvius, there are three relevant factors you should further research:
- 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 Vesuvius 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 Vesuvius is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Vesuvius? 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 firstname.lastname@example.org.