Analyst Forecasts Just Became More Bearish On Horizon Therapeutics Public Limited Company (NASDAQ:HZNP)

The latest analyst coverage could presage a bad day for Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the consensus from 14 analysts covering Horizon Therapeutics is for revenues of US$3.6b in 2022, implying a small 5.6% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$4.0b in 2022. It looks like forecasts have become a fair bit less optimistic on Horizon Therapeutics, given the measurable cut to revenue estimates.

Check out our latest analysis for Horizon Therapeutics

The consensus price target fell 16% to US$117, with the analysts clearly less optimistic about Horizon Therapeutics' valuation following this update. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Horizon Therapeutics at US$164 per share, while the most bearish prices it at US$95.00. 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.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 11% by the end of 2022. This indicates a significant reduction from annual growth of 29% 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 14% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Horizon Therapeutics is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also anticipating slower revenue growth than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Horizon Therapeutics' future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Horizon Therapeutics going forwards.

Unanswered questions? At least one of Horizon Therapeutics' 14 analysts has provided estimates out to 2024, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.