Earnings Beat: Cosmo Pharmaceuticals N.V. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Last week, you might have seen that Cosmo Pharmaceuticals N.V. (VTX:COPN) released its interim result to the market. The early response was not positive, with shares down 6.0% to CHF43.90 in the past week. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at €44m, statutory earnings beat expectations by a notable 53%, coming in at €0.092 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Cosmo Pharmaceuticals

Taking into account the latest results, the most recent consensus for Cosmo Pharmaceuticals from five analysts is for revenues of €115.3m in 2023. If met, it would imply a notable 11% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 41% to €0.95. In the lead-up to this report, the analysts had been modelling revenues of €116.3m and earnings per share (EPS) of €1.06 in 2023. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at CHF76.39, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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 Cosmo Pharmaceuticals analyst has a price target of CHF84.88 per share, while the most pessimistic values it at CHF66.01. This is a very narrow spread of estimates, implying either that Cosmo Pharmaceuticals is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Cosmo Pharmaceuticals' rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 10% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Cosmo Pharmaceuticals is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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.

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 forecasts for Cosmo Pharmaceuticals going out to 2025, and you can see them free on our platform here.

Even so, be aware that Cosmo Pharmaceuticals is showing 2 warning signs in our investment analysis , you should know about...

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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.