New Forecasts: Here's What Analysts Think The Future Holds For Instituto Hermes Pardini S.A. (BVMF:PARD3)

Shareholders in Instituto Hermes Pardini S.A. (BVMF:PARD3) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 7.9% over the past week, closing at R$25.20. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

After this upgrade, Instituto Hermes Pardini's five analysts are now forecasting revenues of R$1.4b in 2020. This would be an okay 7.1% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing R$1.3b of revenue in 2020. The consensus has definitely become more optimistic, showing a solid increase in revenue forecasts.

See our latest analysis for Instituto Hermes Pardini

We'd point out that there was no major changes to their price target of R$26.50, suggesting the latest estimates were not enough to shift their view on the value of the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Instituto Hermes Pardini analyst has a price target of R$33.00 per share, while the most pessimistic values it at R$14.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Instituto Hermes Pardini's revenue growth is expected to slow, with forecast 7.1% increase next year well below the historical 11% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% next year. Factoring in the forecast slowdown in growth, it seems obvious that Instituto Hermes Pardini is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Instituto Hermes Pardini.

Need some more information? At least one of Instituto Hermes Pardini's five analysts has provided estimates out to 2023, which can be seen for 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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