Will McCarthy & Stone plc’s (LON:MCS) Earnings Grow Over The Next Few Years?
The most recent earnings release McCarthy & Stone plc’s (LSE:MCS) announced in August 2017 confirmed that the business gained from a slight tailwind, eventuating to a single-digit earnings growth of 1.50%. Below, I’ve laid out key numbers on how market analysts perceive McCarthy & Stone’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. View our latest analysis for McCarthy & Stone
Market analysts’ consensus outlook for the upcoming year seems optimistic, with earnings climbing by a robust 11.72%. This growth seems to continue into the following year with rates reaching double digit 45.38% compared to today’s earnings, and finally hitting £136.1M by 2021.
While it’s helpful to be aware of the growth each year relative to today’s level, it may be more valuable analyzing the rate at which the company is rising or falling every year, on average. The pro of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of McCarthy & Stone’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 21.76%. This means that, we can presume McCarthy & Stone will grow its earnings by 21.76% every year for the next few years.
Next Steps:
For McCarthy & Stone, I’ve put together three relevant 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 MCS 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 MCS is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of MCS? 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 pass 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.
