These Analysts Just Made A Massive Downgrade To Their 2seventy bio, Inc. (NASDAQ:TSVT) EPS Forecasts

Today is shaping up negative for 2seventy bio, Inc. (NASDAQ:TSVT) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. 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. At US$5.67, shares are up 4.2% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

After the downgrade, the consensus from 2seventy bio's seven analysts is for revenues of US$75m in 2024, which would reflect a stressful 25% decline in sales compared to the last year of performance. The loss per share is anticipated to greatly reduce in the near future, narrowing 45% to US$2.38. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$109m and losses of US$1.52 per share in 2024. 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 2seventy bio

The consensus price target fell 15% to US$9.33, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

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. We would highlight that sales are expected to reverse, with a forecast 25% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 8.2% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 18% per year. It's pretty clear that 2seventy bio's revenues are expected to perform substantially worse than the wider 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 2seventy bio's revenues are expected to grow 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 2seventy bio.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple 2seventy bio analysts - going out to 2026, 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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