Some Innate Pharma S.A. (EPA:IPH) Analysts Just Made A Major Cut To Next Year's Estimates

Today is shaping up negative for Innate Pharma S.A. (EPA:IPH) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from six analysts covering Innate Pharma is for revenues of €24m in 2023, implying a disturbing 54% decline in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 61% to €0.30 per share. Yet before this consensus update, the analysts had been forecasting revenues of €46m and losses of €0.24 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 Innate Pharma

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One more thing stood out to us about these estimates, and it's the idea that Innate Pharma's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 79% to the end of 2023. This tops off a historical decline of 14% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 25% per year. So while a broad number of companies are forecast to grow, unfortunately Innate Pharma is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Innate Pharma. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Innate Pharma's revenues are expected to grow slower than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Innate Pharma, and we wouldn't blame shareholders for feeling a little more cautious themselves.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Innate Pharma analysts - going out to 2025, 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 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.