Suven Pharmaceuticals Limited (NSE: SUVENPHAR) Shareholders are probably feeling a bit disappointed, as its shares fell 7.4% to 480 yen the week after its latest annual results. It was a fairly mixed result, with revenues exceeding expectations reaching 10 billion yen. Statutory profits fell 3.2% below analysts’ expectations to 14.23 per share. Analysts usually update their forecasts with each earnings report, and we can judge from their estimates whether their view of the business has changed or if there are new concerns to consider. We thought readers would find it interesting to see analysts’ latest (statutory) post-earnings forecasts for next year.
See our latest review for Suven Pharmaceuticals
Based on the latest results, the consensus forecast of the three Suven Pharmaceuticals analysts is € 11.4 billion in revenue in 2022, which would reflect a solid 12% improvement in sales compared to the last 12. month. Earnings per share is expected to rise 13% to 16.05. Prior to this earnings report, analysts were forecasting revenues of 11.6 billion yen and earnings per share (EPS) of 17.37 yen in 2022. Analysts appear to have turned a little more negative about the company after the latest results, given the slight deterioration in their earnings per share for next year.
It might come as a surprise to learn that the consensus price target has remained broadly unchanged at 582, with analysts clearly hinting that the expected decline in earnings is unlikely to have much of an impact on valuation. This is not the only conclusion we can draw from this data, however, as some investors also like to factor in the spread in estimates when evaluating analysts’ price targets. The most bullish analyst at Suven Pharmaceuticals has a price target of 600 per share, while the most pessimistic puts it at 552. Even so, with a relatively tight grouping of estimates, it appears that analysts are quite confident in their assessments, suggesting that Suven Pharmaceuticals is an easy-to-predict company or that analysts are all using similar assumptions.
Of course, another way to look at these forecasts is to put them in context to the industry itself. It’s pretty clear that Suven Pharmaceuticals’ revenue growth is expected to slow significantly, revenue by the end of 2022 is expected to show 12% growth on an annualized basis. This is compared to a historic growth rate of 23% over the past year. Compare that to the 132 other companies in this industry with analyst coverage, which are expected to grow revenue by 11% per year. So it’s pretty clear that while Suven Pharmaceuticals’ revenue growth is expected to slow, it is expected to grow roughly in line with the industry.
The bottom line
The bigger concern is that analysts have lowered their earnings per share estimates, suggesting headwinds could be brewing for Suven Pharmaceuticals. Fortunately, there has been no real change in the sales forecast, with activity still expected to grow in line with the industry as a whole. The consensus price target held steady at 582 as the latest estimates were not sufficient to impact their price targets.
With this in mind, we still believe that the long-term trajectory of the company is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Suven Pharmaceuticals through 2023, and you can view them for free on our platform here.
It is also worth noting that we have found 1 warning sign for Suven Pharmaceuticals that you need to take into consideration.
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