Things Look Grim For BioArctic AB (publ) (STO:BIOA B) After Today's Downgrade

Market forces rained on the parade of BioArctic AB (publ) (STO:BIOA B) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business. At kr285, shares are up 7.7% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following this downgrade, BioArctic's four analysts are forecasting 2023 revenues to be kr625m, approximately in line with the last 12 months. Statutory earnings per share are presumed to surge 45% to kr5.37. Before this latest update, the analysts had been forecasting revenues of kr827m and earnings per share (EPS) of kr6.59 in 2023. Indeed, we can see that the analysts are a lot more bearish about BioArctic's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for BioArctic

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's also worth noting that the years of declining sales look to have come to an end, with the forecast for flat revenues to the end of 2023. Historically, BioArctic's sales have shrunk approximately 25% annually 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 23% per year. Although BioArctic's revenues are expected to improve, it seems that it is still expected to grow slower than the wider 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on BioArctic, and their negativity could be grounds for caution.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple BioArctic analysts - going out to 2025, 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.