Yahoo Finance Some Analysts Just Cut Their Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) Estimates
One thing we could say about the analysts on Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the downgrade, the consensus from 14 analysts covering Horizon Therapeutics is for revenues of US$3.6b in 2022, implying a small 5.6% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$4.0b of revenue in 2022. It looks like forecasts have become a fair bit less optimistic on Horizon Therapeutics, given the substantial drop in revenue estimates.
See our latest analysis for Horizon Therapeutics
The consensus price target fell 16% to US$117, with the analysts clearly less optimistic about Horizon Therapeutics' valuation following this update. 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. The most optimistic Horizon Therapeutics analyst has a price target of US$164 per share, while the most pessimistic values it at US$95.00. 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 Horizon Therapeutics shareholders.
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. We would highlight that sales are expected to reverse, with a forecast 11% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 29% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 14% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Horizon Therapeutics is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Horizon Therapeutics after today.
Looking to learn more? We have estimates for Horizon Therapeutics from its 14 analysts out until 2024, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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.
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