Santen Pharmaceutical Co., Ltd. Just Recorded A 25% EPS Beat: Here's What Analysts Are Forecasting Next

Santen Pharmaceutical Co., Ltd. (TSE:4536) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues were JP¥75b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at JP¥29.59, an impressive 25% ahead of estimates. 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 Santen Pharmaceutical

Taking into account the latest results, the ten analysts covering Santen Pharmaceutical provided consensus estimates of JP¥297.4b revenue in 2025, which would reflect a small 2.3% decline over the past 12 months. Statutory earnings per share are predicted to bounce 27% to JP¥96.41. Before this earnings report, the analysts had been forecasting revenues of JP¥293.8b and earnings per share (EPS) of JP¥93.57 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 was unchanged at JP¥1,973, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on Santen Pharmaceutical, with the most bullish analyst valuing it at JP¥2,400 and the most bearish at JP¥1,550 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.0% by the end of 2025. This indicates a significant reduction from annual growth of 5.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.2% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Santen Pharmaceutical is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Santen Pharmaceutical's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at JP¥1,973, with the latest estimates not enough to have an impact on their price targets.

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. We have estimates - from multiple Santen Pharmaceutical analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Santen Pharmaceutical .

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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.