Yahoo Finance Biogen Inc. Just Released Its Full-Year Earnings: Here's What Analysts Think
Last week, you might have seen that Biogen Inc. (NASDAQ:BIIB) released its yearly result to the market. The early response was not positive, with shares down 3.3% to US$269 in the past week. The result was positive overall - although revenues of US$14b were in line with what analysts predicted, Biogen surprised by delivering a statutory profit of US$31.42 per share, modestly greater than expected. Following the result, 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've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
See our latest analysis for Biogen
Taking into account the latest results, the 29 analysts covering Biogen provided consensus estimates of US$14.1b revenue in 2020, which would reflect a small 2.2% decline on its sales over the past 12 months. Statutory earnings per share are forecast to reduce 2.4% to US$30.71 in the same period. In the lead-up to this report, analysts had been modelling revenues of US$13.8b and earnings per share (EPS) of US$29.69 in 2020. So the consensus seems to have become somewhat more optimistic on Biogen's earnings potential following these results.
The consensus price target was unchanged at US$312, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Biogen, with the most bullish analyst valuing it at US$393 and the most bearish at US$245 per share. This shows there is still quite 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.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Biogen's performance in recent years. These estimates imply that sales are expected to slow, with a forecast revenue decline of 2.2% a significant reduction from annual growth of 7.6% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 18% next year. It's pretty clear that Biogen's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Biogen's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at US$312, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that in mind, we wouldn't be too quick to come to a conclusion on Biogen. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Biogen analysts - going out to 2024, and you can see them free on our platform here.
You can also see whether Biogen is carrying too much debt, and whether its balance sheet is healthy, for free 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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