Analysts Are Upgrading Legend Biotech Corporation (NASDAQ:LEGN) After Its Latest Results
The analysts might have been a bit too bullish on Legend Biotech Corporation (NASDAQ:LEGN), given that the company fell short of expectations when it released its full-year results last week. The numbers were weak, with revenues of US$117m coming in 13% short of analyst estimates. Statutory losses were US$1.40 per share, 2.9% larger than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Legend Biotech
After the latest results, the nine analysts covering Legend Biotech are now predicting revenues of US$245.7m in 2023. If met, this would reflect a substantial 110% improvement in sales compared to the last 12 months. Before this earnings announcement, the analysts had been modelling revenues of US$192.5m and losses of US$1.41 per share in 2023. What's really interesting is that while the consensus made a sizeable gain to revenue estimates, it no longer provides an earnings per share estimate, suggesting that - following the latest results - the market believes revenue is more important.
The average price target rose 5.8% to US$72.91, with the analysts clearly having become more optimistic about Legend Biotech'sprospects following these results. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Legend Biotech, with the most bullish analyst valuing it at US$87.00 and the most bearish at US$65.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Legend Biotech's growth to accelerate, with the forecast 110% annualised growth to the end of 2023 ranking favourably alongside historical growth of 24% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Legend Biotech to grow faster than the wider industry.
The Bottom Line
The highlight for us was that the analysts increased their revenue forecasts for Legend Biotech next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
At least one of Legend Biotech's nine analysts has provided estimates out to 2025, which can be seen for free on our platform here.
You still need to take note of risks, for example - Legend Biotech has 2 warning signs we think you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
