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Results: Alexion Pharmaceuticals, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Simply Wall St

Last week, you might have seen that Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) released its full-year result to the market. The early response was not positive, with shares down 5.6% to US$99.39 in the past week. Revenues were US$5.0b, approximately in line with what analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$10.70, an impressive 21% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Alexion Pharmaceuticals after the latest results.

Check out our latest analysis for Alexion Pharmaceuticals

NasdaqGS:ALXN Past and Future Earnings, February 3rd 2020

Taking into account the latest results, the most recent consensus for Alexion Pharmaceuticals from 22 analysts is for revenues of US$5.63b in 2020, which is a decent 13% increase on its sales over the past 12 months. Statutory earnings per share are forecast to sink 18% to US$8.87 in the same period. In the lead-up to this report, analysts had been modelling revenues of US$5.64b and earnings per share (EPS) of US$9.40 in 2020. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at US$143, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Alexion Pharmaceuticals at US$180 per share, while the most bearish prices it at US$115. 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.

Further, we can compare these estimates to past performance, and see how Alexion Pharmaceuticals forecasts compare to the wider market's forecast performance. Next year brings more of the same, according to analysts, with revenue forecast to grow 13%, in line with its 16% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 18% per year. So although Alexion Pharmaceuticals is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider market.

The Bottom Line

The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Alexion Pharmaceuticals's revenues are expected to perform worse than the wider market. 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.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Alexion Pharmaceuticals analysts - going out to 2024, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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