In This Article:
Kerry Group plc’s (ISE:KRZ) latest earnings update in December 2017 indicated that the company benefited from a strong tailwind, leading to a double-digit earnings growth of 10.39%. Below is a brief commentary on my key takeaways on how market analysts perceive Kerry Group’s earnings growth trajectory over the next couple of 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. Check out our latest analysis for Kerry Group
Analysts’ outlook for this coming year seems pessimistic, with earnings reducing by -1.50%. But in the following year, there is a complete contrast in performance, with reaching double digit 12.58% compared to today’s level and continues to increase to €734.70M in 2021.
Although it’s informative understanding the growth rate year by year relative to today’s figure, it may be more valuable to determine the rate at which the business is growing on average every year. The pro of this approach is that we can get a better picture of the direction of Kerry Group’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 7.45%. This means, we can assume Kerry Group will grow its earnings by 7.45% every year for the next couple of years.
Next Steps:
For Kerry Group, I’ve put together three key factors you should further research:
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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.
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Valuation: What is KRZ 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 KRZ is currently mispriced by the market.
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Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of KRZ? 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.