Broker Revenue Forecasts For Banco do Brasil S.A. (BVMF:BBAS3) Are Surging Higher

Banco do Brasil S.A. (BVMF:BBAS3) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. The revenue forecast for next year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

Following the upgrade, the current consensus from Banco do Brasil's twelve analysts is for revenues of R$93b in 2023 which - if met - would reflect a notable 12% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 24% to R$10.67. Prior to this update, the analysts had been forecasting revenues of R$80b and earnings per share (EPS) of R$10.58 in 2023. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

Check out the opportunities and risks within the BR Banks industry.

It may not be a surprise to see that the analysts have reconfirmed their price target of R$54.08, implying that the uplift in sales is not expected to greatly contribute to Banco do Brasil's valuation in the near term. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Banco do Brasil, with the most bullish analyst valuing it at R$74.00 and the most bearish at R$40.00 per share. 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.

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. It's clear from the latest estimates that Banco do Brasil's rate of growth is expected to accelerate meaningfully, with the forecast 9.6% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 6.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 13% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Banco do Brasil is expected to grow slower than the wider industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Banco do Brasil.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Banco do Brasil going out to 2023, 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.