Need To Know: Analysts Are Much More Bullish On Petroreconcavo S.A. (BVMF:RECV3) Revenues

Petroreconcavo S.A. (BVMF:RECV3) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. The stock price has risen 5.3% to R$27.00 over the past week, suggesting investors are becoming more optimistic. Could this big upgrade push the stock even higher?

After this upgrade, Petroreconcavo's five analysts are now forecasting revenues of R$2.9b in 2022. This would be a substantial 96% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of R$2.3b in 2022. It looks like there's been a clear increase in optimism around Petroreconcavo, given the sizeable gain to revenue forecasts.

See our latest analysis for Petroreconcavo

Additionally, the consensus price target for Petroreconcavo increased 11% to R$34.08, showing a clear increase in optimism from the analysts involved. 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 Petroreconcavo analyst has a price target of R$37.00 per share, while the most pessimistic values it at R$32.30. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

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 Petroreconcavo's rate of growth is expected to accelerate meaningfully, with the forecast 146% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 79% over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Petroreconcavo is expected to grow much faster than its industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Petroreconcavo this year. The analysts also expect revenues to grow faster than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Petroreconcavo.

Analysts are clearly in love with Petroreconcavo at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 2 other warning signs we've identified .

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.