The Long Term Growth Forecast is the consensus long-term growth rate amongst analysts which cover the company. It is a data point provide the annualised compound growth rate over the next 3 to 7 year period.
Long-term growth is an estimate of the compound average rate of growth an analyst expects over and is expressed as a percentage increase per year.
It is usually calculated on Earnings per Share, but sometimes or Funds from Operations per Share, whichever is considered as primary for a particular company.
Our data providers (Reuters) explain that 'as most analysts do not provide the basis of the calculation of their growth rates, the estimates collected are assumed to include a combination of past and future years with at least one future period included, and are calculated on a compounded annual growth rate (CAGR) basis.
Research by Dreman and others has shown that analyst forecasts tend to be highly inaccurate, particularly over longer term timeframes.
A study by Lawrence Brown in the Financial Analysts Journal looked at 130,000 forecasts by analysts from 1985 to 1996 and found that the average absolute error was over 90%!.
| Ticker | Name | LT Growth Forecast | StockRank™ |
|---|---|---|---|
| LON:AWE | Alphawave IP | 123.20 | 37 |
| LON:IDS | International Distributions Services | 99.30 | 49 |
| LON:PNN | Pennon | 95.22 | 31 |
| LON:WIZZ | Wizz Air Holdings | 60.20 | 47 |
| LON:RR. | Rolls-Royce Holdings | 54.92 | 87 |