New Forecasts: Here's What Analysts Think The Future Holds For Neuren Pharmaceuticals Limited (ASX:NEU)

Neuren Pharmaceuticals Limited (ASX:NEU) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Neuren Pharmaceuticals has also found favour with investors, with the stock up an unbelievable 32% to AU$16.33 over the past week. Could this upgrade be enough to drive the stock even higher?

After the upgrade, the consensus from Neuren Pharmaceuticals' six analysts is for revenues of AU$163m in 2024, which would reflect an uneasy 16% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to plummet 27% to AU$0.67 in the same period. Before this latest update, the analysts had been forecasting revenues of AU$123m and earnings per share (EPS) of AU$0.63 in 2024. The most recent forecasts are noticeably more optimistic, with a considerable lift to revenue estimates and a lift to earnings per share as well.

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$26.86, suggesting that the forecast performance does not have a long term impact on the company's valuation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 29% by the end of 2024. This indicates a significant reduction from annual growth of 82% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 35% per year. It's pretty clear that Neuren Pharmaceuticals' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Neuren Pharmaceuticals.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. 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..

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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.