Time To Worry? Analysts Just Downgraded Their Enauta Participações S.A. (BVMF:ENAT3) Outlook

Market forces rained on the parade of Enauta Participações S.A. (BVMF:ENAT3) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following this downgrade, Enauta Participações' five analysts are forecasting 2023 revenues to be R$1.7b, approximately in line with the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of R$2.1b in 2023. It looks like forecasts have become a fair bit less optimistic on Enauta Participações, given the pretty serious reduction to revenue estimates.

See our latest analysis for Enauta Participações

There was no particular change to the consensus price target of R$18.42, with Enauta Participações' latest outlook seemingly not enough to result in a change of valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 0.4% by the end of 2023. This indicates a significant reduction from annual growth of 24% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 0.7% per year. The forecasts do look comparatively optimistic for Enauta Participações, since they're expecting it to shrink slower than the industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. Analysts also expect revenues to perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Enauta Participações going forwards.

There might be good reason for analyst bearishness towards Enauta Participações, like its declining profit margins. For more information, you can click here to discover this and the 1 other concern we've identified.

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.