Syngene International Limited Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts
Last week, you might have seen that Syngene International Limited (NSE:SYNGENE) released its first-quarter result to the market. The early response was not positive, with shares down 5.1% to ₹386 in the past week. It looks like a pretty bad result, given that revenues fell 14% short of analyst estimates at ₹7.4b, and the company reported a statutory loss of ₹0.22 per share instead of the profit that the analysts had been forecasting. 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.
Taking into account the latest results, the consensus forecast from Syngene International's eight analysts is for revenues of ₹37.2b in 2027. This reflects a modest 3.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 65% to ₹9.17. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹39.2b and earnings per share (EPS) of ₹9.65 in 2027. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
See our latest analysis for Syngene International
The consensus price target fell 6.4% to ₹524, with the weaker earnings outlook clearly leading valuation estimates. 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 Syngene International analyst has a price target of ₹735 per share, while the most pessimistic values it at ₹340. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Syngene International's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 4.4% growth on an annualised basis. This is compared to a historical growth rate of 8.9% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% per year. Factoring in the forecast slowdown in growth, it seems obvious that Syngene International is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Syngene International. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Syngene International going out to 2029, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Syngene International that you should be aware of.
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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.