Yahoo Finance The Teva Pharmaceutical Industries Limited (NYSE:TEVA) Yearly Results Are Out And Analysts Have Published New Forecasts
Teva Pharmaceutical Industries Limited (NYSE:TEVA) shareholders are probably feeling a little disappointed, since its shares fell 8.4% to US$11.30 in the week after its latest annual results. The statutory results were mixed overall, with revenues of US$17b in line with analyst forecasts, but losses of US$3.64 per share, some 4.6% larger than the analysts were predicting. 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 Teva Pharmaceutical Industries
Following last week's earnings report, Teva Pharmaceutical Industries' 21 analysts are forecasting 2021 revenues to be US$16.8b, approximately in line with the last 12 months. Earnings are expected to improve, with Teva Pharmaceutical Industries forecast to report a statutory profit of US$1.41 per share. Before this earnings report, the analysts had been forecasting revenues of US$16.8b and earnings per share (EPS) of US$1.37 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$12.62, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. There are some variant perceptions on Teva Pharmaceutical Industries, with the most bullish analyst valuing it at US$20.00 and the most bearish at US$9.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. From these estimates it looks as though the analysts expect the years of declining sales to come to an end, given the flat revenue forecast for next year. That would be a definite improvement, given that the past five years have seen sales shrink five years annually. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 5.9% next year. So it's pretty clear that, although revenues are improving, Teva Pharmaceutical Industries is still expected to grow slower than the industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Teva Pharmaceutical Industries' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Teva Pharmaceutical Industries' revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$12.62, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Teva Pharmaceutical Industries. Long-term earnings power is much more important than next year's profits. We have forecasts for Teva Pharmaceutical Industries going out to 2025, and you can see them free on our platform here.
It might also be worth considering whether Teva Pharmaceutical Industries' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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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