Yahoo Finance What Should You Know About The Future Of Blackmores Limited’s (ASX:BKL)?
Looking at Blackmores Limited’s (ASX:BKL) earnings update in June 2018, analyst forecasts seem fairly subdued, as a 18% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 22%. By 2019, we can expect Blackmores’s bottom line to reach AU$83m, a jump from the current trailing-twelve-month AU$70m. Below is a brief commentary around Blackmores’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 Blackmores
How is Blackmores going to perform in the near future?
The longer term expectations from the 8 analysts of BKL is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. 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 BKL’s earnings growth over these next few years.
From the current net income level of AU$70m and the final forecast of AU$110m by 2021, the annual rate of growth for BKL’s earnings is 15%. EPS reaches A$6.31 in the final year of forecast compared to the current A$4.06 EPS today. Growth in the bottom line seems to suggest cost cutting activities, as revenues is expected to grow much slower than earnings. With a current profit margin of 12%, this movement will result in a margin of 12% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Blackmores, there are three important aspects 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 Blackmores 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 Blackmores is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Blackmores? 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.
