Looking at Michael Kors Holdings Limited’s (NYSE:KORS) earnings update in September 2018, it seems that analyst forecasts are fairly optimistic, with earnings expected to grow by 26% in the upcoming year relative to the past 5-year average growth rate of -4.0%. Currently with trailing-twelve-month earnings of US$592m, we can expect this to reach US$745m by 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Michael Kors Holdings in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Can we expect Michael Kors Holdings to keep growing?
The longer term expectations from the 28 analysts of KORS is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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 KORS’s earnings growth over these next few years.
This results in an annual growth rate of 7.8% based on the most recent earnings level of US$592m to the final forecast of US$870m by 2021. This leads to an EPS of $5.57 in the final year of projections relative to the current EPS of $3.89. In 2021, KORS’s profit margin will have expanded from 13% to 17%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Michael Kors Holdings, I’ve put together three fundamental aspects 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 Michael Kors 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 Michael Kors Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Michael Kors 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!
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.