Need To Know: Analysts Are Much More Bullish On Banco do Brasil S.A. (BVMF:BBAS3) Revenues

Celebrations may be in order for Banco do Brasil S.A. (BVMF:BBAS3) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Investor sentiment seems to be improving too, with the share price up 9.4% to R$42.70 over the past 7 days. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the latest upgrade, Banco do Brasil's 13 analysts currently expect revenues in 2023 to be R$99b, approximately in line with the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of R$88b in 2023. The consensus has definitely become more optimistic, showing a nice gain to revenue forecasts.

View our latest analysis for Banco do Brasil

We'd point out that there was no major changes to their price target of R$55.48, suggesting the latest estimates were not enough to shift their view on the value of the business. 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 Banco do Brasil analyst has a price target of R$81.00 per share, while the most pessimistic values it at R$40.00. 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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 0.003% by the end of 2023. This indicates a significant reduction from annual growth of 8.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 12% annually for the foreseeable future. It's pretty clear that Banco do Brasil's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Banco do Brasil 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 Banco do Brasil.

Better yet, our automated discounted cash flow calculation (DCF) suggests Banco do Brasil could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

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.

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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.