Hikma Pharmaceuticals PLC (LON:HIK) released its annual results last week, and we wanted to see how the company was performing and what industry forecasters thought of the company in the wake of that report. Revenue of US$2.6 billion was in line with expectations, although statutory earnings per share (EPS) came in below expectations at US$1.81, missing estimates by 2.9%. Analysts typically update their forecasts with each earnings report, and we can judge from their estimates if their view of the business has changed or if there are new concerns to consider. So we’ve rounded up the latest post-earnings guidance to see what the estimates suggest for next year.
Given the latest results, the current consensus of eight analysts at Hikma Pharmaceuticals expects revenue of $2.71 billion in 2022, which would reflect a healthy 6.1% increase in sales over the past 12 months. Earnings per share are expected to rise 9.3% to US$1.99. Looking ahead to this report, analysts had modeled revenue of US$2.74 billion and earnings per share (EPS) of US$2.01 in 2022. Consensus analysts don’t appear to have seen anything. either in these results that would have changed. their view of the business, given that there has been no major change in their estimates.
Analysts reconfirmed their price target of UK£27.93, showing that the activity is going well and in line with expectations. This is not the only conclusion we can draw from this data, however, as some investors also like to consider the discrepancy in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Hikma Pharmaceuticals at £30.70 per share, while the most bearish values it at £20.71. This is a very narrow range of estimates, implying either that Hikma Pharmaceuticals is an easy company to value, or – more likely – that analysts rely heavily on certain key assumptions.
These estimates are interesting, but it may be useful to draw broader lines when seeing how the predictions compare, both to Hikma Pharmaceuticals’ past performance and to its peers in the same industry. We can infer from the latest estimates that forecasts call for a continuation of historical trends for Hikma Pharmaceuticals, as annualized revenue growth of 6.1% through the end of 2022 is roughly in line with annualized revenue growth of 5 .7% over the last five years. Juxtapose that to our data, which suggests that other companies (with analyst coverage) in the industry should see revenue growth of 7.2% annually. So while Hikma Pharmaceuticals is expected to maintain its revenue growth rate, it is only growing roughly in step with the overall industry.
The most important thing to remember is that there has been no major shift in sentiment, with analysts confirming the company is performing in line with its previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company expected to grow at roughly the same rate as the overall industry. The consensus price target held steady at UK£27.93 as the latest estimates were not enough to impact their price targets.
Continuing this thinking, we believe that the company’s long-term outlook is much more relevant than next year’s results. We have estimates – from several analysts at Hikma Pharmaceuticals – going out to 2024, and you can see them for free on our platform here.
You can also view our Hikma Pharmaceuticals balance sheet analysis for free and find out if we think Hikma Pharmaceuticals has too much debt. on our platform here.
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