Alkem Laboratories Limited (NSE:ALKEM) Just Reported And Analysts Have Been Lifting Their Price Targets

Investors in Alkem Laboratories Limited (NSE:ALKEM) had a good week, as its shares rose 4.6% to close at ₹5,149 following the release of its quarterly results. It was a credible result overall, with revenues of ₹33b and statutory earnings per share of ₹82.31 both in line with analyst estimates, showing that Alkem Laboratories is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Alkem Laboratories

Taking into account the latest results, the consensus forecast from Alkem Laboratories' 22 analysts is for revenues of ₹142.6b in 2025. This reflects a notable 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 37% to ₹180. Before this earnings report, the analysts had been forecasting revenues of ₹141.9b and earnings per share (EPS) of ₹164 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 18% to ₹5,069. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Alkem Laboratories analyst has a price target of ₹6,780 per share, while the most pessimistic values it at ₹3,600. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 10% growth on an annualised basis. That is in line with its 11% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 11% annually. It's clear that while Alkem Laboratories' revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Alkem Laboratories' earnings potential next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Alkem Laboratories 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.