News Flash: 6 Analysts Think BioArctic AB (publ) (STO:BIOA B) Earnings Are Under Threat

The latest analyst coverage could presage a bad day for BioArctic AB (publ) (STO:BIOA B), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business. The stock price has risen 8.3% to kr224 over the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the downgrade, the consensus from six analysts covering BioArctic is for revenues of kr494m in 2024, implying a stressful 20% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to plummet 96% to kr0.094 in the same period. Before this latest update, the analysts had been forecasting revenues of kr596m and earnings per share (EPS) of kr1.83 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

See our latest analysis for BioArctic

Despite the cuts to forecast earnings, there was no real change to the kr365 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the BioArctic's past performance and to peers in the same industry. One more thing stood out to us about these estimates, and it's the idea that BioArctic's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 20% to the end of 2024. This tops off a historical decline of 9.5% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 18% annually. So while a broad number of companies are forecast to grow, unfortunately BioArctic 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 cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that BioArctic's revenues are expected to grow slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of BioArctic.

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

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.