Looking at Biogen Inc.’s (NASDAQ:BIIB) earnings update in December 2018, the consensus outlook from analysts appear fairly confident, with profits predicted to increase by 19% next year compared with the past 5-year average growth rate of 7.4%. By 2020, we can expect Biogen’s bottom line to reach US$5.3b, a jump from the current trailing-twelve-month of US$4.4b. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Check out our latest analysis for Biogen
How is Biogen going to perform in the near future?
The longer term view from the 27 analysts covering BIIB is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of BIIB’s earnings growth over these next few years.
From the current net income level of US$4.4b and the final forecast of US$5.4b by 2022, the annual rate of growth for BIIB’s earnings is 5.3%. This leads to an EPS of $27.3 in the final year of projections relative to the current EPS of $21.62. In 2022, BIIB’s profit margin will have expanded from 33% to 38%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Biogen, I’ve compiled three important factors you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Biogen worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Biogen is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Biogen? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.