Forecast: Analysts Think Neuren Pharmaceuticals Limited's (ASX:NEU) Business Prospects Have Improved Drastically

Neuren Pharmaceuticals Limited (ASX:NEU) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

Following the latest upgrade, the current consensus, from the five analysts covering Neuren Pharmaceuticals, is for revenues of AU$154m in 2024, which would reflect a stressful 34% reduction in Neuren Pharmaceuticals' sales over the past 12 months. Statutory earnings per share are anticipated to plunge 41% to AU$0.73 in the same period. Before this latest update, the analysts had been forecasting revenues of AU$134m and earnings per share (EPS) of AU$0.55 in 2024. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for Neuren Pharmaceuticals

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of AU$26.74, suggesting that the forecast performance does not have a long term impact on the company's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Neuren Pharmaceuticals' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 34% by the end of 2024. This indicates a significant reduction from annual growth of 80% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 20% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Neuren Pharmaceuticals is expected to lag the wider 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. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Neuren Pharmaceuticals.

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 Neuren Pharmaceuticals going out to 2026, and you can see them free on our platform here..

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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.