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Investors in IQVIA Holdings Inc. (NYSE:IQV) had a good week, as its shares rose 2.5% to close at US$158 following the release of its quarterly results. Revenues of US$2.5b beat expectations by a respectable 4.9%, although statutory losses per share increased. IQVIA Holdings lost US$0.12, which was 49% more than what the analysts had included in their models. 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.
Following last week's earnings report, IQVIA Holdings' 20 analysts are forecasting 2020 revenues to be US$11.0b, approximately in line with the last 12 months. Statutory earnings per share are predicted to shoot up 121% to US$1.52. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$10.7b and earnings per share (EPS) of US$1.31 in 2020. So it seems there's been a definite increase in optimism about IQVIA Holdings' future following the latest results, with a substantial gain in the earnings per share forecasts in particular.
It will come as no surprise to learn that the analysts have increased their price target for IQVIA Holdings 13% to US$179on the back of these upgrades. 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. The most optimistic IQVIA Holdings analyst has a price target of US$204 per share, while the most pessimistic values it at US$138. 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 IQVIA Holdings shareholders.
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. It's pretty clear that there is an expectation that IQVIA Holdings' revenue growth will slow down substantially, with revenues next year expected to grow 1.0%, compared to a historical growth rate of 21% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.1% next year. Factoring in the forecast slowdown in growth, it seems obvious that IQVIA Holdings is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards IQVIA Holdings following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for IQVIA Holdings going out to 2023, and you can see them free on our platform here..
Even so, be aware that IQVIA Holdings is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...
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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