Aurobindo Pharma Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
Last week saw the newest annual earnings release from Aurobindo Pharma Limited (NSE:AUROPHARMA), an important milestone in the company's journey to build a stronger business. The result was positive overall - although revenues of ₹232b were in line with what the analysts predicted, Aurobindo Pharma surprised by delivering a statutory profit of ₹48.32 per share, modestly greater than expected. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Aurobindo Pharma
Taking into account the latest results, the current consensus from Aurobindo Pharma's 21 analysts is for revenues of ₹252.8b in 2021, which would reflect a meaningful 9.0% increase on its sales over the past 12 months. Statutory earnings per share are predicted to swell 11% to ₹53.81. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹249.0b and earnings per share (EPS) of ₹51.24 in 2021. So the consensus seems to have become somewhat more optimistic on Aurobindo Pharma's earnings potential following these results.
The consensus price target rose 16% to ₹803, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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. Currently, the most bullish analyst values Aurobindo Pharma at ₹920 per share, while the most bearish prices it at ₹510. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. We would highlight that Aurobindo Pharma's revenue growth is expected to slow, with forecast 9.0% increase next year well below the historical 12%p.a. growth over the last five years. Compare this to the 137 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 8.8% per year. So it's pretty clear that, while Aurobindo Pharma's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Aurobindo Pharma's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Aurobindo Pharma. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Aurobindo Pharma going out to 2023, and you can see them free on our platform here..
Plus, you should also learn about the 1 warning sign we've spotted with Aurobindo Pharma .
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This article by Simply Wall St is general in nature. 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. Thank you for reading.