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Analysts Just Slashed Their Global Blood Therapeutics, Inc. (NASDAQ:GBT) EPS Numbers

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Simply Wall St
·3 min read
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One thing we could say about the analysts on Global Blood Therapeutics, Inc. (NASDAQ:GBT) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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.

Following the downgrade, the current consensus from Global Blood Therapeutics' 18 analysts is for revenues of US$269m in 2021 which - if met - would reflect a sizeable 217% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 49% to US$2.33. However, before this estimates update, the consensus had been expecting revenues of US$336m and US$1.16 per share in losses. 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.

See our latest analysis for Global Blood Therapeutics

earnings-and-revenue-growth
earnings-and-revenue-growth

The consensus price target fell 15% to US$91.07, implicitly signalling that lower earnings per share are a leading indicator for Global Blood Therapeutics' valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Global Blood Therapeutics analyst has a price target of US$152 per share, while the most pessimistic values it at US$45.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at Global Blood Therapeutics. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Global Blood Therapeutics.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Global Blood Therapeutics analysts - going out to 2024, and you can see them 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.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.