€41.78: That's What Analysts Think Galapagos NV (AMS:GLPG) Is Worth After Its Latest Results

Shareholders of Galapagos NV (AMS:GLPG) will be pleased this week, given that the stock price is up 10% to €38.61 following its latest quarterly results. Revenues came in at €179m, an impressive 67% ahead of analyst forecasts. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Galapagos

After the latest results, the consensus from Galapagos' eight analysts is for revenues of €529.0m in 2023, which would reflect a discernible 3.4% decline in sales compared to the last year of performance. Losses are expected to increase substantially, hitting €3.08 per share. Before this latest report, the consensus had been expecting revenues of €531.2m and €3.06 per share in losses.

As a result, it's unexpected to see that the consensus price target fell 6.0% to €41.78, with the analysts seemingly becoming more concerned about ongoing losses, despite making no major changes to their forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Galapagos analyst has a price target of €51.00 per share, while the most pessimistic values it at €35.00. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Galapagos' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.6% by the end of 2023. This indicates a significant reduction from annual growth of 8.9% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 21% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Galapagos is expected to lag the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Galapagos' future valuation.

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 Galapagos going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Galapagos 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.