Alkem Laboratories Limited (NSE:ALKEM) Just Reported Annual Earnings: Have Analysts Changed Their Mind On The Stock?

There's been a notable change in appetite for Alkem Laboratories Limited (NSE:ALKEM) shares in the week since its full-year report, with the stock down 12% to ₹4,810. It was a credible result overall, with revenues of ₹130b and statutory earnings per share of ₹150 both in line with analyst estimates, showing that Alkem Laboratories is executing in line with expectations. 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.

See our latest analysis for Alkem Laboratories

Following the latest results, Alkem Laboratories' 21 analysts are now forecasting revenues of ₹139.4b in 2025. This would be a reasonable 7.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 18% to ₹178. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹142.4b and earnings per share (EPS) of ₹181 in 2025. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The average price target was steady at ₹5,174even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Alkem Laboratories at ₹6,891 per share, while the most bearish prices it at ₹3,600. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Alkem Laboratories' revenue growth is expected to slow, with the forecast 7.4% annualised growth rate until the end of 2025 being well below the historical 11% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.9% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Alkem Laboratories.

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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. 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. At Simply Wall St, we have a full range of analyst estimates for Alkem Laboratories going out to 2027, 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.

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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.