Analysts Just Slashed Their Mayne Pharma Group Limited (ASX:MYX) EPS Numbers

One thing we could say about the analysts on Mayne Pharma Group Limited (ASX:MYX) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the latest downgrade, the four analysts covering Mayne Pharma Group provided consensus estimates of AU$345m revenue in 2023, which would reflect an uncomfortable 19% decline on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 77% to AU$0.034. However, before this estimates update, the consensus had been expecting revenues of AU$428m and AU$0.022 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out the opportunities and risks within the AU Pharmaceuticals industry.

The consensus price target fell 32% to AU$0.28, implicitly signalling that lower earnings per share are a leading indicator for Mayne Pharma Group's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Mayne Pharma Group, with the most bullish analyst valuing it at AU$0.37 and the most bearish at AU$0.17 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Mayne Pharma Group's past performance and to peers in the same industry. Over the past five years, revenues have declined around 7.6% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 19% decline in revenue until the end of 2023. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 7.1% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Mayne Pharma Group to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Mayne Pharma Group's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Mayne Pharma Group.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Mayne Pharma Group analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.