Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN): What Are The Future Prospects?

After Regeneron Pharmaceuticals, Inc.’s (NASDAQ:REGN) earnings announcement on 30 June 2019, it seems that analyst expectations are fairly bearish, with profits predicted to rise by 7.2% next year against the higher past 5-year average growth rate of 38%. Currently with trailing-twelve-month earnings of US$2.4b, we can expect this to reach US$2.6b by 2020. Below is a brief commentary on the longer term outlook the market has for Regeneron Pharmaceuticals. For those interested in more of an analysis of the company, you can research its fundamentals here.

Check out our latest analysis for Regeneron Pharmaceuticals

Can we expect Regeneron Pharmaceuticals to keep growing?

The longer term view from the 21 analysts covering REGN is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for REGN, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

NasdaqGS:REGN Past and Future Earnings, August 19th 2019
NasdaqGS:REGN Past and Future Earnings, August 19th 2019

By 2022, REGN’s earnings should reach US$2.9b, from current levels of US$2.4b, resulting in an annual growth rate of 6.9%. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of $21.14 in the final year of forecast compared to the current $22.65 EPS today. However, the expansion of the current 36% margin is not expected to be sustained, as it begins to contract to 35% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Regeneron Pharmaceuticals, I’ve compiled three fundamental aspects you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Regeneron Pharmaceuticals worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Regeneron Pharmaceuticals is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Regeneron Pharmaceuticals? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.