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What Are Analysts Expecting From Wagners Holding Company Limited (ASX:WGN) Over The Next Year?

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After Wagners Holding Company Limited's (ASX:WGN) recent earnings announcement in December 2018, analyst consensus outlook appear bearish, with earnings expected to decline by 9.8% in the upcoming year relative to the past 5-year average growth rate of 37%. With trailing-twelve-month net income at current levels of AU$25m, the consensus growth rate suggests that earnings will decline to AU$22m by 2020. Below is a brief commentary around Wagners Holding's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

Check out our latest analysis for Wagners Holding

Exciting times ahead?

The 4 analysts covering WGN view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for WGN, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

ASX:WGN Past and Future Earnings, June 3rd 2019
ASX:WGN Past and Future Earnings, June 3rd 2019

This results in an annual growth rate of 20% based on the most recent earnings level of AU$25m to the final forecast of AU$37m by 2022. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of A$0.15 in the final year of forecast compared to the current A$0.17 EPS today. Margins are currently sitting at 11%, which is expected to expand to 11% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Wagners Holding, I've compiled three relevant aspects you should further research:

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  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 Wagners Holding 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 Wagners Holding is currently mispriced by the market.

  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Wagners Holding? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.