These Analysts Just Made A Huge Downgrade To Their Mithra Pharmaceuticals SA (EBR:MITRA) EPS Forecasts

Market forces rained on the parade of Mithra Pharmaceuticals SA (EBR:MITRA) shareholders today, when the analysts downgraded their forecasts for this year. 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 current consensus, from the three analysts covering Mithra Pharmaceuticals, is for revenues of €39m in 2023, which would reflect a sizeable 38% reduction in Mithra Pharmaceuticals' sales over the past 12 months. Per-share losses are expected to see a sharp uptick, reaching €1.36. Yet before this consensus update, the analysts had been forecasting revenues of €82m and losses of €0.55 per share in 2023. 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 our latest analysis for Mithra Pharmaceuticals

The consensus price target fell 18% to €2.17, implicitly signalling that lower earnings per share are a leading indicator for Mithra Pharmaceuticals' valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past five years, revenues have declined around 9.0% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 61% decline in revenue until the end of 2023. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 7.2% per year. So while a broad number of companies are forecast to grow, unfortunately Mithra Pharmaceuticals is expected to see its sales affected worse than other companies in the 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 Mithra Pharmaceuticals' revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

That said, the analysts might have good reason to be negative on Mithra Pharmaceuticals, given dilutive stock issuance over the past year. Learn more, and discover the 3 other risks we've identified, for 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 downgrading 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.