H. Lundbeck A/S Just Missed Earnings - But Analysts Have Updated Their Models

H. Lundbeck A/S (CPH:HLUN B) shareholders are probably feeling a little disappointed, since its shares fell 2.3% to kr.32.28 in the week after its latest annual results. Revenues of kr.20b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at kr.2.31, missing estimates by 5.1%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for H. Lundbeck

Taking into account the latest results, the consensus forecast from H. Lundbeck's ten analysts is for revenues of kr.21.0b in 2024. This reflects a modest 5.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 35% to kr.3.11. Before this earnings report, the analysts had been forecasting revenues of kr.21.3b and earnings per share (EPS) of kr.3.02 in 2024. So the consensus seems to have become somewhat more optimistic on H. Lundbeck's earnings potential following these results.

The consensus price target was unchanged at kr.38.42, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values H. Lundbeck at kr.50.00 per share, while the most bearish prices it at kr.33.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. The analysts are definitely expecting H. Lundbeck's growth to accelerate, with the forecast 5.5% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.9% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.3% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, H. Lundbeck is expected to grow slower than the wider 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 H. Lundbeck 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 H. Lundbeck's revenue is expected to perform worse 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple H. Lundbeck analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for H. Lundbeck 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.