Yahoo Finance Will Marks and Spencer Group plc’s (LON:MKS) Earnings Grow In The Years Ahead?
In March 2018, Marks and Spencer Group plc (LSE:MKS) released its latest earnings announcement, which suggested that the business endured a major headwind with earnings falling by -78.05%. Below is a brief commentary on my key takeaways on how market analysts view Marks and Spencer Group’s earnings growth trajectory over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. See our latest analysis for Marks and Spencer Group
Market analysts’ consensus outlook for next year seems buoyant, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally reaching UK£426.59M in 2021.
While it is informative understanding the growth rate year by year relative to today’s figure, it may be more valuable to analyze the rate at which the company is moving every year, on average. The benefit of this technique is that we can get a bigger picture of the direction of Marks and Spencer Group’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 32.55%. This means that, we can expect Marks and Spencer Group will grow its earnings by 32.55% every year for the next couple of years.
Next Steps:
For Marks and Spencer Group, I’ve compiled three relevant aspects you should further examine:
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 MKS 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 MKS is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MKS? 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 pass 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.
