Earnings Beat: Ipsen S.A. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

A week ago, Ipsen S.A. (EPA:IPN) came out with a strong set of full-year numbers that could potentially lead to a re-rate of the stock. Ipsen beat earnings, with revenues hitting €2.7b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 19%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Ipsen

Following the latest results, Ipsen's 14 analysts are now forecasting revenues of €2.74b in 2021. This would be a reasonable 2.0% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to decrease 2.9% to €6.37 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €2.74b and earnings per share (EPS) of €6.45 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of €89.38, suggesting that the company has met expectations in its recent result. 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. Currently, the most bullish analyst values Ipsen at €113 per share, while the most bearish prices it at €75.00. 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.

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. We would highlight that Ipsen's revenue growth is expected to slow, with the forecast 2.0% annualised growth rate until the end of 2021 being well below the historical 13% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Ipsen.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Ipsen's revenues are 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.

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 estimates - from multiple Ipsen analysts - going out to 2024, and you can see them free on our platform here.

Even so, be aware that Ipsen is showing 3 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

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