Analysts Just Shipped A Sizeable Upgrade To Their Gan & Lee Pharmaceuticals. (SHSE:603087) Estimates

Gan & Lee Pharmaceuticals. (SHSE:603087) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investors have been pretty optimistic on Gan & Lee Pharmaceuticals too, with the stock up 14% to CN¥49.60 over the past week. Could this upgrade be enough to drive the stock even higher?

After this upgrade, Gan & Lee Pharmaceuticals' three analysts are now forecasting revenues of CN¥3.8b in 2024. This would be a substantial 44% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 85% to CN¥1.22. Prior to this update, the analysts had been forecasting revenues of CN¥3.3b and earnings per share (EPS) of CN¥1.08 in 2024. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for Gan & Lee Pharmaceuticals

Despite these upgrades, the analysts have not made any major changes to their price target of CN¥58.00, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Gan & Lee Pharmaceuticals' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 62% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 20% a year over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 24% annually. So it looks like Gan & Lee Pharmaceuticals is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Gan & Lee Pharmaceuticals could be a good candidate for more research.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Gan & Lee Pharmaceuticals going out to 2026, and you can see them free on our platform here..

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.