Will Univar Inc.’s (NYSE:UNVR) Earnings Grow In The Next Couple Of Years?
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The most recent earnings update Univar Inc.’s (NYSE:UNVR) released in December 2018 revealed that the business experienced a strong tailwind, leading to a double-digit earnings growth of 44%. Below is a brief commentary on my key takeaways on how market analysts perceive Univar’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Univar
Market analysts’ prospects for this coming year seems optimistic, with earnings expanding by a robust 48%. This growth seems to continue into the following year with rates arriving at double digit 91% compared to today’s earnings, and finally hitting US$421m by 2022.
Even though it’s informative understanding the growth rate year by year relative to today’s figure, it may be more valuable to evaluate the rate at which the business is rising or falling every year, on average. The benefit of this approach is that it ignores near term flucuations and accounts for the overarching direction of Univar’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve appended 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 28%. This means that, we can assume Univar will grow its earnings by 28% every year for the next couple of years.
Next Steps:
For Univar, there are three pertinent factors you should look at:
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 UNVR 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 UNVR is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of UNVR? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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. On rare occasion, data errors may occur. Thank you for reading.
