Revenue Miss: GlaxoSmithKline Pharmaceuticals Limited Fell 5.9% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

It's been a sad week for GlaxoSmithKline Pharmaceuticals Limited (NSE:GLAXO), who've watched their investment drop 11% to ₹2,154 in the week since the company reported its third-quarter result. Results look mixed - while revenue fell marginally short of analyst estimates at ₹8.1b, statutory earnings were in line with expectations, at ₹36.05 per share. 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 GlaxoSmithKline Pharmaceuticals

Taking into account the latest results, the current consensus from GlaxoSmithKline Pharmaceuticals' four analysts is for revenues of ₹37.1b in 2025. This would reflect a decent 11% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 42% to ₹44.38. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹37.2b and earnings per share (EPS) of ₹43.48 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 10% to ₹1,962, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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. The most optimistic GlaxoSmithKline Pharmaceuticals analyst has a price target of ₹2,452 per share, while the most pessimistic values it at ₹1,531. 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. The analysts are definitely expecting GlaxoSmithKline Pharmaceuticals' growth to accelerate, with the forecast 9.0% annualised growth to the end of 2025 ranking favourably alongside historical growth of 1.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. GlaxoSmithKline Pharmaceuticals is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards GlaxoSmithKline Pharmaceuticals following these results. 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.

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 GlaxoSmithKline Pharmaceuticals analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that GlaxoSmithKline Pharmaceuticals is showing 1 warning sign in our investment analysis , you should know about...

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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.