Analysts Just Shaved Their Mesoblast Limited (ASX:MSB) Forecasts Dramatically

One thing we could say about the analysts on Mesoblast Limited (ASX:MSB) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon. At AU$2.46, 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.

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Following the downgrade, the current consensus from Mesoblast's seven analysts is for revenues of US$195m in 2027 which - if met - would reflect a major 63% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 77% to US$0.01 per share. Previously, the analysts had been modelling revenues of US$221m and earnings per share (EPS) of US$0.02 in 2027. So we can see that the consensus has become notably more bearish on Mesoblast's outlook with these numbers, making a substantial drop in this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

Check out our latest analysis for Mesoblast

There was no major change to the consensus price target of AU$3.91, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 63% growth on an annualised basis. That is in line with its 60% annual growth 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 revenues grow 6.0% per year. So it's pretty clear that Mesoblast is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that analysts are expecting Mesoblast to become unprofitable this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Mesoblast.

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 Mesoblast analysts - going out to 2029, and you can see them free on our platform here.

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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.