Investors in LBX Pharmacy Chain Joint Stock Company (SHSE:603883) had a good week, as its shares rose 4.7% to close at CN¥33.47 following the release of its first-quarter results. Revenues CN¥5.5b disappointed slightly, at9.2% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of CN¥0.55 coming in 11% above what was anticipated. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from LBX Pharmacy Chain's twelve analysts is for revenues of CN¥26.0b in 2024. This would reflect a decent 15% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 18% to CN¥1.94. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥28.3b and earnings per share (EPS) of CN¥1.96 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.
The consensus has reconfirmed its price target of CN¥39.35, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on LBX Pharmacy Chain's market value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on LBX Pharmacy Chain, with the most bullish analyst valuing it at CN¥45.79 and the most bearish at CN¥27.60 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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 analysts are definitely expecting LBX Pharmacy Chain's growth to accelerate, with the forecast 21% annualised growth to the end of 2024 ranking favourably alongside historical growth of 17% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect LBX Pharmacy Chain to grow faster than the wider 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. 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.
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 estimates - from multiple LBX Pharmacy Chain analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - LBX Pharmacy Chain has 1 warning sign we think 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.