Biogen Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
As you might know, Biogen Inc. (NASDAQ:BIIB) just kicked off its latest first-quarter results with some very strong numbers. Results were good overall, with revenues beating analyst predictions by 3.7% to hit US$3.5b. Statutory earnings per share (EPS) came in at US$8.08, some 6.6% above whatthe analysts had expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Biogen
Taking into account the latest results, the current consensus, from the 30 analysts covering Biogen, is for revenues of US$14.0b in 2020, which would reflect a noticeable 3.0% reduction in Biogen's sales over the past 12 months. Statutory earnings per share are forecast to shrink 5.2% to US$30.78 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$14.0b and earnings per share (EPS) of US$30.37 in 2020. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of US$328, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Biogen analyst has a price target of US$413 per share, while the most pessimistic values it at US$240. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Biogen shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Biogen's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with the forecast 3.0% revenue decline a notable change from historical growth of 7.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 17% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Biogen is expected to lag 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$328, with the latest estimates not enough to have an impact on their price targets.
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. We have forecasts for Biogen going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Biogen .
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