Yahoo Finance What Should Investors Know About The Future Of Taylor Wimpey plc’s (LON:TW.)?
In July 2018, Taylor Wimpey plc (LON:TW.) released its earnings update. Generally, it seems that analyst expectations are fairly bearish, with earnings expected to grow by 10.9% in the upcoming year against the higher past 5-year average growth rate of 22.3%. Presently, with latest-twelve-month earnings at UK£634.1m, we should see this growing to UK£703.4m by 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Taylor Wimpey in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
See our latest analysis for Taylor Wimpey
Exciting times ahead?
The longer term expectations from the 13 analysts of TW. 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 TW.’s earnings growth over these next few years.
By 2021, TW.’s earnings should reach UK£680.7m, from current levels of UK£555.3m, resulting in an annual growth rate of 6.0%. This leads to an EPS of £0.24 in the final year of projections relative to the current EPS of £0.17. The bottom-line growth seems to be caused by cost cutting activities, as revenues is expected to grow much slower than earnings. With a current profit margin of 14.0%, this movement will result in a margin of 14.6% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Taylor Wimpey, I’ve put together 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 Taylor Wimpey 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 Taylor Wimpey is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Taylor Wimpey? 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.
