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Looking at Biogen Inc.'s (NASDAQ:BIIB) earnings update on 31 March 2019, analysts seem cautiously optimistic, with profits predicted to increase by 15% next year compared with the past 5-year average growth rate of 7.1%. With trailing-twelve-month net income at current levels of US$4.4b, we should see this rise to US$5.1b in 2020. Below is a brief commentary around Biogen's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Can we expect Biogen to keep growing?
The longer term expectations from the 26 analysts of BIIB is tilted towards the 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 BIIB'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.
By 2022, BIIB's earnings should reach US$5.2b, from current levels of US$4.4b, resulting in an annual growth rate of 1.4%. EPS reaches $28.51 in the final year of forecast compared to the current $21.62 EPS today. Margins are currently sitting at 33%, which is expected to expand to 39% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Biogen, there are three important aspects you should further research:
- 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 Biogen 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 Biogen is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Biogen? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.