The latest analyst coverage could presage a bad day for Mayne Pharma Group Limited (ASX:MYX), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the latest downgrade, the four analysts covering Mayne Pharma Group provided consensus estimates of AU$345m revenue in 2023, which would reflect an uncomfortable 19% decline on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of AU$428m in 2023. It looks like forecasts have become a fair bit less optimistic on Mayne Pharma Group, given the measurable cut to revenue estimates.
Notably, the analysts have cut their price target 32% to AU$0.28, suggesting concerns around Mayne Pharma Group's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Mayne Pharma Group at AU$0.37 per share, while the most bearish prices it at AU$0.17. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Over the past five years, revenues have declined around 7.6% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 19% decline in revenue until the end of 2023. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 7.7% per year. So while a broad number of companies are forecast to grow, unfortunately Mayne Pharma Group is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Mayne Pharma Group this year. They're also anticipating slower revenue growth than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on Mayne Pharma Group after today.
Hungry for more information? At least one of Mayne Pharma Group's four analysts has provided estimates out to 2025, which can be seen for 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.
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