A week ago, Astellas Pharma Inc. (TSE:4503) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. Astellas Pharma delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting JP¥641b-14% above indicated-andJP¥79.15-55% above forecasts- respectively The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Astellas Pharma after the latest results.
Taking into account the latest results, Astellas Pharma's twelve analysts currently expect revenues in 2027 to be JP¥2.29t, approximately in line with the last 12 months. Statutory per-share earnings are expected to be JP¥200, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of JP¥2.26t and earnings per share (EPS) of JP¥191 in 2027. So the consensus seems to have become somewhat more optimistic on Astellas Pharma's earnings potential following these results.
Check out our latest analysis for Astellas Pharma
There's been no major changes to the consensus price target of JP¥2,413, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Astellas Pharma analyst has a price target of JP¥3,100 per share, while the most pessimistic values it at JP¥1,700. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Astellas Pharma's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 0.8% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.4% annually. Factoring in the forecast slowdown in growth, it seems obvious that Astellas Pharma is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Astellas Pharma's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at JP¥2,413, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Astellas Pharma going out to 2029, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for Astellas Pharma that we have uncovered.
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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.