It's been a good week for Teva Pharmaceutical Industries Limited (NYSE:TEVA) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.4% to US$17.54. Revenues of US$4.2b beat expectations by a respectable 2.9%, although statutory losses per share increased. Teva Pharmaceutical Industries lost US$0.75, which was 87% more than what the analysts had included in their models. Following the result, the 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Teva Pharmaceutical Industries after the latest results.
Following last week's earnings report, Teva Pharmaceutical Industries' nine analysts are forecasting 2024 revenues to be US$16.2b, approximately in line with the last 12 months. Teva Pharmaceutical Industries is also expected to turn profitable, with statutory earnings of US$1.85 per share. Before this earnings report, the analysts had been forecasting revenues of US$16.0b and earnings per share (EPS) of US$0.96 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the very substantial lift in earnings per share expectations following these results.
The consensus price target was unchanged at US$20.10, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Teva Pharmaceutical Industries, with the most bullish analyst valuing it at US$24.00 and the most bearish at US$14.86 per share. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 1.7% annualised revenue decline to the end of 2024 is roughly in line with the historical trend, which saw revenues shrink 2.0% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 9.6% annually. So while a broad number of companies are forecast to grow, unfortunately Teva Pharmaceutical Industries is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Teva Pharmaceutical Industries following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Teva Pharmaceutical Industries' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$20.10, 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. We have estimates - from multiple Teva Pharmaceutical Industries analysts - going out to 2026, and you can see them free on our platform here.
It might also be worth considering whether Teva Pharmaceutical Industries' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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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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