Today is shaping up negative for Arbutus Biopharma Corporation (NASDAQ:ABUS) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, the four analysts covering Arbutus Biopharma provided consensus estimates of US$8.3m revenue in 2024, which would reflect a painful 54% decline on its sales over the past 12 months. Per-share losses are expected to creep up to US$0.46. Yet before this consensus update, the analysts had been forecasting revenues of US$15m and losses of US$0.43 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Arbutus Biopharma

There was no major change to the consensus price target of CA$6.09, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Arbutus Biopharma analyst has a price target of CA$6.79 per share, while the most pessimistic values it at CA$5.35. This is a very narrow spread of estimates, implying either that Arbutus Biopharma is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Arbutus Biopharma's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 54% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 38% 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 17% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Arbutus Biopharma is expected to lag 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 Arbutus Biopharma's revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Arbutus Biopharma after today.