Astellas Pharma Inc. (TSE:4503) shareholders are probably feeling a little disappointed, since its shares fell 3.9% to JP¥2,472 in the week after its latest half-year results. Statutory earnings per share of JP¥55.68 unfortunately missed expectations by 13%, although it was encouraging to see revenues of JP¥1.3t exceed expectations by 2.3%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following last week's earnings report, Astellas Pharma's 13 analysts are forecasting 2027 revenues to be JP¥2.39t, approximately in line with the last 12 months. Statutory per share are forecast to be JP¥211, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥2.37t and earnings per share (EPS) of JP¥220 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
View our latest analysis for Astellas Pharma
The consensus price target held steady at JP¥2,554, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values Astellas Pharma at JP¥3,100 per share, while the most bearish prices it at JP¥2,000. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. 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 0.5% 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 3.5% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Astellas Pharma.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Astellas Pharma. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts 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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