Brokers Are Upgrading Their Views On EZTEC Empreendimentos e Participações S.A. (BVMF:EZTC3) With These New Forecasts

EZTEC Empreendimentos e Participações S.A. (BVMF:EZTC3) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.

Following the upgrade, the most recent consensus for EZTEC Empreendimentos e Participações from its nine analysts is for revenues of R$974m in 2020 which, if met, would be an okay 7.3% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to sink 12% to R$1.48 in the same period. Previously, the analysts had been modelling revenues of R$882m and earnings per share (EPS) of R$1.34 in 2020. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for EZTEC Empreendimentos e Participações

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the EZTEC Empreendimentos e Participações' past performance and to peers in the same industry. For example, we noticed that EZTEC Empreendimentos e Participações' rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 7.3%, well above its historical decline of 5.4% a year over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 14% next year. Although EZTEC Empreendimentos e Participações' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. The clear improvement in sentiment should be enough to get most shareholders feeling more optimistic about EZTEC Empreendimentos e Participações' future.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on EZTEC Empreendimentos e Participações that suggests the company could be somewhat undervalued. You can learn more about our valuation methodology 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.

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