Rigel Pharma: Underhanded Compliments

 Following the latest results, Rigel Pharmaceuticals' six analysts are now forecasting revenues of US$281.1m in 2025. This would be a satisfactory 4.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to dive 21% to US$4.33 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$223.4m and earnings per share (EPS) of US$2.68 in 2025. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.

It will come as no surprise to learn that the analysts have increased their price target for Rigel Pharmaceuticals 14% to US$38.33on the back of these upgrades. 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 Rigel Pharmaceuticals at US$67.00 per share, while the most bearish prices it at US$23.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Rigel Pharmaceuticals' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 10% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 19% annually. Factoring in the forecast slowdown in growth, it seems obvious that Rigel Pharmaceuticals is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Rigel Pharmaceuticals following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

https://finance.yahoo.com/news/results-rigel-pharmaceuticals-inc-exceeded-104316233.html