Celebrations may be in order for Verona Pharma plc (NASDAQ:VRNA) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Verona Pharma will make substantially more sales than they'd previously expected. Investors have been pretty optimistic on Verona Pharma too, with the stock up 16% to US$73.22 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

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Following the upgrade, the latest consensus from Verona Pharma's ten analysts is for revenues of US$402m in 2025, which would reflect a huge 239% improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$0.26 in per-share earnings. Prior to this update, the analysts had been forecasting revenues of US$327m and earnings per share (EPS) of US$0.17 in 2025. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

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It will come as no surprise to learn that the analysts have increased their price target for Verona Pharma 12% to US$90.80 on the back of these upgrades.

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. The analysts are definitely expecting Verona Pharma's growth to accelerate, with the forecast 4x annualised growth to the end of 2025 ranking favourably alongside historical growth of 40% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Verona Pharma is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Verona Pharma.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Verona Pharma going out to 2027, and you can see them 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.