Jazz Pharmaceuticals plc (NASDAQ:JAZZ) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.
Following the upgrade, the current consensus from Jazz Pharmaceuticals' eleven analysts is for revenues of US$3.1b in 2021 which - if met - would reflect a sizeable 28% increase on its sales over the past 12 months. Per-share earnings are expected to jump 37% to US$12.69. Before this latest update, the analysts had been forecasting revenues of US$2.7b and earnings per share (EPS) of US$10.13 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
Despite these upgrades, the analysts have not made any major changes to their price target of US$204, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Jazz Pharmaceuticals at US$235 per share, while the most bearish prices it at US$176. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Jazz Pharmaceuticals is an easy business to forecast or the underlying assumptions are obvious.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Jazz Pharmaceuticals' growth to accelerate, with the forecast 39% annualised growth to the end of 2021 ranking favourably alongside historical growth of 12% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.2% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Jazz Pharmaceuticals to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Jazz Pharmaceuticals.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Jazz Pharmaceuticals analysts - going out to 2025, and you can see them free on our platform here.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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