Biogen Inc. Just Missed EPS By 21%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Biogen Inc. (NASDAQ:BIIB) released its full-year result to the market. The early response was not positive, with shares down 7.1% to US$223 in the past week. It looks like a pretty bad result, all things considered. Although revenues of US$9.8b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 21% to hit US$7.97 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Biogen

Taking into account the latest results, the 29 analysts covering Biogen provided consensus estimates of US$9.51b revenue in 2024, which would reflect a measurable 3.3% decline over the past 12 months. Statutory earnings per share are predicted to shoot up 59% to US$12.72. Before this earnings report, the analysts had been forecasting revenues of US$9.66b and earnings per share (EPS) of US$14.88 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$303, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Biogen analyst has a price target of US$400 per share, while the most pessimistic values it at US$230. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Biogen shareholders.

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 also point out that the forecast 3.3% annualised revenue decline to the end of 2024 is better than the historical trend, which saw revenues shrink 9.0% annually over the past five years By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 17% per year. So while a broad number of companies are forecast to grow, unfortunately Biogen is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment 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 Biogen's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$303, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Biogen analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Biogen , and understanding them should be part of your investment process.

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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.