Results: Chugai Pharmaceutical Co., Ltd. Exceeded Expectations And The Consensus Has Updated Its Estimates

Chugai Pharmaceutical Co., Ltd. (TSE:4519) defied analyst predictions to release its half-year results, which were ahead of market expectations. Chugai Pharmaceutical delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting JP¥553b-11% above indicated-andJP¥113-22% above forecasts- respectively This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Chugai Pharmaceutical

Taking into account the latest results, Chugai Pharmaceutical's 14 analysts currently expect revenues in 2024 to be JP¥1.10t, approximately in line with the last 12 months. Statutory per-share earnings are expected to be JP¥217, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of JP¥1.09t and earnings per share (EPS) of JP¥210 in 2024. So the consensus seems to have become somewhat more optimistic on Chugai Pharmaceutical's earnings potential following these results.

The consensus price target was unchanged at JP¥6,161, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Chugai Pharmaceutical at JP¥8,500 per share, while the most bearish prices it at JP¥4,500. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Chugai Pharmaceutical's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.6% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.1% per year. Factoring in the forecast slowdown in growth, it seems obvious that Chugai Pharmaceutical is also expected to grow slower than other industry participants.

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 Chugai Pharmaceutical following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Chugai Pharmaceutical's revenue is 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. At Simply Wall St, we have a full range of analyst estimates for Chugai Pharmaceutical going out to 2026, and you can see them free on our platform here..

You can also see our analysis of Chugai Pharmaceutical's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com