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Shareholders might have noticed that Anthem, Inc. (NYSE:ANTM) filed its full-year result this time last week. The early response was not positive, with shares down 6.6% to US$301 in the past week. It was a credible result overall, with revenues of US$122b and statutory earnings per share of US$17.98 both in line with analyst estimates, showing that Anthem is executing in line with expectations. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the 14 analysts covering Anthem are now predicting revenues of US$130.3b in 2021. If met, this would reflect a satisfactory 6.9% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to soar 33% to US$23.92. Before this earnings report, the analysts had been forecasting revenues of US$129.3b and earnings per share (EPS) of US$23.99 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$362, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Anthem analyst has a price target of US$454 per share, while the most pessimistic values it at US$300. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Next year brings more of the same, according to the analysts, with revenue forecast to grow 6.9%, in line with its 7.8% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 7.0% per year. So although Anthem is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Anthem going out to 2025, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 2 warning signs for Anthem that you should be aware of.
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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