Analysts Just Shaved Their Galapagos NV (AMS:GLPG) Forecasts Dramatically

One thing we could say about the analysts on Galapagos NV (AMS:GLPG) - 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) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. Surprisingly the share price has been buoyant, rising 13% to €24.72 in the past 7 days. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.

Following the latest downgrade, the current consensus, from the ten analysts covering Galapagos, is for revenues of €263m in 2025, which would reflect a small 4.7% reduction in Galapagos' sales over the past 12 months. Per-share losses are expected to explode, reaching €3.48 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of €302m and losses of €1.63 per share in 2025. 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 Galapagos

The consensus price target fell 7.1% to €32.03, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2025 compared to the historical decline of 27% per annum 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 20% per year. So while a broad number of companies are forecast to grow, unfortunately Galapagos 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Galapagos.

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 Galapagos going out to 2027, 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 with high insider ownership.

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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.