Yahoo Finance What Are Analysts Saying About The Future Of Majestic Wine plc’s (LON:WINE)?
In April 2018, Majestic Wine plc (LON:WINE) announced its latest earnings update. Overall, analyst forecasts seem pessimistic, with profits predicted to drop by -37.81% next year. However, this pessimism is not unsubstantiated given the negative past 5-year average earnings growth. Currently with a profit of UK£7.40m, the consensus growth rate suggests that earnings will drop to UK£4.60m by 2019. Below is a brief commentary around Majestic Wine’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 Majestic Wine
Can we expect Majestic Wine to keep growing?
Longer term expectations from the 4 analysts covering WINE’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of WINE’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 34.53% based on the most recent earnings level of UK£7.40m to the final forecast of UK£16.68m by 2021. EPS reaches £0.18 in the final year of forecast compared to the current £0.11 EPS today. The main reason for growth is a result of reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. In 2021, WINE’s profit margin will have expanded from 1.55% to 2.81%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Majestic Wine, there are three relevant factors 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 Majestic Wine 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 Majestic Wine is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Majestic Wine? 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.
