Yahoo Finance What Do Analysts Think About Wagners Holding Company Limited’s (ASX:WGN) Earnings Outlook?
Wagners Holding Company Limited’s (ASX:WGN) latest earnings announcement in June 2018 confirmed that the company benefited from a robust tailwind, eventuating to a double-digit earnings growth of 30%. Below is my commentary, albeit very simple and high-level, on how market analysts predict Wagners Holding’s earnings growth outlook 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 Wagners Holding
Market analysts’ prospects for next year seems pessimistic, with earnings reducing by -5.7%. But in the following year, there is a complete contrast in performance, with reaching double digit 4.6% compared to today’s level and continues to increase to AU$28m in 2021.
Even though it is useful to understand the rate of growth each year relative to today’s figure, it may be more insightful gauging the rate at which the business is moving every year, on average. The pro of this technique is that we can get a better picture of the direction of Wagners Holding’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 5.1%. This means that, we can assume Wagners Holding will grow its earnings by 5.1% every year for the next couple of years.
Next Steps:
For Wagners Holding, I’ve compiled three relevant 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 WGN 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 WGN is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of WGN? 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.
