Newsflash: CVC Brasil Operadora e Agência de Viagens S.A. (BVMF:CVCB3) Analysts Have Been Trimming Their Revenue Forecasts

Market forces rained on the parade of CVC Brasil Operadora e Agência de Viagens S.A. (BVMF:CVCB3) shareholders today, when the analysts downgraded their forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the current consensus from CVC Brasil Operadora e Agência de Viagens' five analysts is for revenues of R$732m in 2021 which - if met - would reflect a huge 86% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of R$943m in 2021. It looks like forecasts have become a fair bit less optimistic on CVC Brasil Operadora e Agência de Viagens, given the pretty serious reduction to revenue estimates.

Check out our latest analysis for CVC Brasil Operadora e Agência de Viagens

There was no particular change to the consensus price target of R$30.75, with CVC Brasil Operadora e Agência de Viagens' latest outlook seemingly not enough to result in a change of 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. There are some variant perceptions on CVC Brasil Operadora e Agência de Viagens, with the most bullish analyst valuing it at R$36.00 and the most bearish at R$23.00 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that CVC Brasil Operadora e Agência de Viagens' rate of growth is expected to accelerate meaningfully, with the forecast 246% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 0.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect CVC Brasil Operadora e Agência de Viagens to grow faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for CVC Brasil Operadora e Agência de Viagens this year. Analysts also expect revenues to grow faster than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on CVC Brasil Operadora e Agência de Viagens after today.

Unanswered questions? We have estimates for CVC Brasil Operadora e Agência de Viagens from its five analysts out until 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 downgrading 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.
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