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MJ Gleeson plc (LON:GLE): Is It A Smart Long Term Opportunity?

Erna Eldridge

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After MJ Gleeson plc’s (LON:GLE) earnings announcement in June 2018, analysts seem cautiously bearish, with profits predicted to rise by 7.8% next year compared with the higher past 5-year average growth rate of 20%. Currently with trailing-twelve-month earnings of UK£30m, we can expect this to reach UK£33m by 2020. Below is a brief commentary on the longer term outlook the market has for MJ Gleeson. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

Check out our latest analysis for MJ Gleeson

How is MJ Gleeson going to perform in the near future?

The longer term expectations from the 5 analysts of GLE is tilted towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of GLE’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

LSE:GLE Future Profit February 11th 19

By 2022, GLE’s earnings should reach UK£41m, from current levels of UK£30m, resulting in an annual growth rate of 9.1%. EPS reaches £0.74 in the final year of forecast compared to the current £0.56 EPS today. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 15% to 15% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For MJ Gleeson, there are three essential 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 MJ Gleeson 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 MJ Gleeson is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of MJ Gleeson? 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 editorial-team@simplywallst.com.