Laboratorios Farmaceuticos Rovi, S.A. (BME:ROVI) Just Reported Third-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

There's been a notable change in appetite for Laboratorios Farmaceuticos Rovi, S.A. (BME:ROVI) shares in the week since its quarterly report, with the stock down 19% to €64.60. It was a workmanlike result, with revenues of €235m coming in 2.4% ahead of expectations, and statutory earnings per share of €3.20, in line with analyst appraisals. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Laboratorios Farmaceuticos Rovi

Taking into account the latest results, the consensus forecast from Laboratorios Farmaceuticos Rovi's seven analysts is for revenues of €831.2m in 2025. This reflects a modest 4.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 13% to €3.65. Before this earnings report, the analysts had been forecasting revenues of €868.2m and earnings per share (EPS) of €3.82 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

Despite the cuts to forecast earnings, there was no real change to the €95.75 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Laboratorios Farmaceuticos Rovi, with the most bullish analyst valuing it at €106 and the most bearish at €86.00 per share. This is a very narrow spread of estimates, implying either that Laboratorios Farmaceuticos Rovi is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Laboratorios Farmaceuticos Rovi's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.2% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that Laboratorios Farmaceuticos Rovi is also expected to grow slower than other industry participants.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at €95.75, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Laboratorios Farmaceuticos Rovi. Long-term earnings power is much more important than next year's profits. We have forecasts for Laboratorios Farmaceuticos Rovi going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Laboratorios Farmaceuticos Rovi that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.