The Dis-Chem Pharmacies Limited (JSE:DCP) Yearly Results Are Out And Analysts Have Published New Forecasts

Investors in Dis-Chem Pharmacies Limited (JSE:DCP) had a good week, as its shares rose 2.8% to close at R35.15 following the release of its yearly results. Results were roughly in line with estimates, with revenues of R30b and statutory earnings per share of R0.99. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Dis-Chem Pharmacies

Taking into account the latest results, the consensus forecast from Dis-Chem Pharmacies' five analysts is for revenues of R33.7b in 2023, which would reflect a meaningful 11% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to soar 30% to R1.29. Yet prior to the latest earnings, the analysts had been anticipated revenues of R33.7b and earnings per share (EPS) of R1.29 in 2023. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of R37.44, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Dis-Chem Pharmacies at R38.10 per share, while the most bearish prices it at R35.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 11% growth on an annualised basis. That is in line with its 11% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.8% annually. So it's pretty clear that Dis-Chem Pharmacies is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Dis-Chem Pharmacies going out to 2024, and you can see them free on our platform here.

You can also see whether Dis-Chem Pharmacies is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.