Petroreconcavo S.A. Just Missed Earnings - But Analysts Have Updated Their Models

Petroreconcavo S.A. (BVMF:RECV3) just released its latest yearly report and things are not looking great. Petroreconcavo missed analyst forecasts, with revenues of R$2.8b and statutory earnings per share (EPS) of R$2.42, falling short by 2.4% and 5.6% respectively. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Petroreconcavo

Taking into account the latest results, the most recent consensus for Petroreconcavo from seven analysts is for revenues of R$3.92b in 2024. If met, it would imply a major 39% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 184% to R$6.86. Before this earnings report, the analysts had been forecasting revenues of R$3.96b and earnings per share (EPS) of R$6.43 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of R$31.20, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Petroreconcavo analyst has a price target of R$39.00 per share, while the most pessimistic values it at R$24.50. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Petroreconcavo shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Petroreconcavo'shistorical trends, as the 39% annualised revenue growth to the end of 2024 is roughly in line with the 40% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 0.8% annually. So it's clear that not only is revenue growth expected to be maintained, but Petroreconcavo is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Petroreconcavo following these results. Fortunately, they also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Their estimates also suggest that Petroreconcavo's revenue is expected to perform better than the wider industry. The consensus price target held steady at R$31.20, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Petroreconcavo going out to 2026, and you can see them free on our platform here.

Even so, be aware that Petroreconcavo is showing 2 warning signs in our investment analysis , you should know about...

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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.