Yahoo Finance Hikma Pharmaceuticals PLC Just Beat EPS By 12%: Here's What Analysts Think Will Happen Next
Hikma Pharmaceuticals PLC (LON:HIK) investors will be delighted, with the company turning in some strong numbers with its latest results. Hikma Pharmaceuticals beat earnings, with revenues hitting US$1.6b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 12%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Hikma Pharmaceuticals
Taking into account the latest results, Hikma Pharmaceuticals' ten analysts currently expect revenues in 2024 to be US$3.06b, approximately in line with the last 12 months. Statutory earnings per share are predicted to shoot up 45% to US$1.86. Before this earnings report, the analysts had been forecasting revenues of US$2.99b and earnings per share (EPS) of US$1.83 in 2024. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small increase to to revenue forecasts.
It may not be a surprise to see thatthe analysts have reconfirmed their price target of UK£23.07, implying that the uplift in revenue is not expected to greatly contribute to Hikma Pharmaceuticals's valuation in the near term. 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 Hikma Pharmaceuticals at UK£28.37 per share, while the most bearish prices it at UK£19.82. This is a very narrow spread of estimates, implying either that Hikma Pharmaceuticals is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hikma Pharmaceuticals' past performance and to peers in the same industry. We would highlight that Hikma Pharmaceuticals' revenue growth is expected to slow, with the forecast 2.6% annualised growth rate until the end of 2024 being well below the historical 6.3% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that Hikma Pharmaceuticals is also expected to grow slower than other industry participants.
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 upgraded their revenue estimates for next year, even though it is expected to grow slower than 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Hikma Pharmaceuticals analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for Hikma Pharmaceuticals you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
