Yahoo Finance What Should You Know About The Future Of Lookers plc's (LON:LOOK)?
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The latest earnings release Lookers plc's (LON:LOOK) announced in December 2018 indicated that the company endured a minor headwind with earnings deteriorating from UK£48m to UK£44m, a change of -9.2%. Below, I've laid out key numbers on how market analysts perceive Lookers's earnings growth outlook over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
View our latest analysis for Lookers
Analysts' expectations for the upcoming year seems rather subdued, with earnings climbing by a single digit 5.0%. The growth outlook in the following year seems much more positive with rates arriving at double digit 12% compared to today’s earnings, and finally hitting UK£51m by 2022.
Even though it is informative understanding the growth rate each year relative to today’s value, it may be more insightful to gauge the rate at which the earnings are moving on average every year. The benefit of this approach is that it ignores near term flucuations and accounts for the overarching direction of Lookers'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 the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 5.4%. This means that, we can assume Lookers will grow its earnings by 5.4% every year for the next few years.
Next Steps:
For Lookers, I've compiled three fundamental 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 LOOK 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 LOOK is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of LOOK? 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.
