Oxford Biomedica plc (LON:OXB) Just Reported And Analysts Have Been Lifting Their Price Targets
It's been a good week for Oxford Biomedica plc (LON:OXB) shareholders, because the company has just released its latest full-year results, and the shares gained 4.8% to UK£10.54. The results don't look great, especially considering that statutory losses grew 76% toUK£0.078 per share. Revenues of UK£88m did beat expectations by 2.4%, but it looks like a bit of a cold comfort. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Oxford Biomedica
After the latest results, the four analysts covering Oxford Biomedica are now predicting revenues of UK£119.7m in 2021. If met, this would reflect a substantial 36% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Oxford Biomedica forecast to report a statutory profit of UK£0.03 per share. Before this earnings report, the analysts had been forecasting revenues of UK£116.2m and earnings per share (EPS) of UK£0.043 in 2021. While next year's revenue estimates increased, there was also a pretty serious reduction to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.
The analysts also upgraded Oxford Biomedica's price target 6.3% to UK£11.56, implying that the higher sales are expected to generate enough value to offset the forecast decline in earnings. 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. Currently, the most bullish analyst values Oxford Biomedica at UK£14.50 per share, while the most bearish prices it at UK£9.50. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Oxford Biomedica's rate of growth is expected to accelerate meaningfully, with the forecast 36% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 27% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Oxford Biomedica is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected 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.
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 Oxford Biomedica going out to 2024, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Oxford Biomedica 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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