The analysts covering Neuren Pharmaceuticals Limited (ASX:NEU) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the latest downgrade, the current consensus, from the six analysts covering Neuren Pharmaceuticals, is for revenues of AU$66m in 2025, which would reflect a stressful 66% reduction in Neuren Pharmaceuticals' sales over the past 12 months. Statutory earnings per share are anticipated to dive 72% to AU$0.26 in the same period. Prior to this update, the analysts had been forecasting revenues of AU$122m and earnings per share (EPS) of AU$0.35 in 2025. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

View our latest analysis for Neuren Pharmaceuticals

Analysts made no major changes to their price target of AU$25.81, suggesting the downgrades are not expected to have a long-term impact on Neuren Pharmaceuticals' valuation.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 66% by the end of 2025. This indicates a significant reduction from annual growth of 82% 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 42% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Neuren Pharmaceuticals is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Neuren Pharmaceuticals. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Neuren Pharmaceuticals after the downgrade.

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 Neuren Pharmaceuticals analysts - 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.