Stock Analysis

Petroreconcavo S.A. Just Missed EPS By 5.6%: Here's What Analysts Think Will Happen Next

BOVESPA:RECV3
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As you might know, Petroreconcavo S.A. (BVMF:RECV3) last week released its latest annual, and things did not turn out so great for shareholders. 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. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Petroreconcavo after the latest results.

Check out our latest analysis for Petroreconcavo

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BOVESPA:RECV3 Earnings and Revenue Growth March 8th 2024

Taking into account the latest results, the current consensus from Petroreconcavo's seven analysts is for revenues of R$3.96b in 2024. This would reflect a substantial 41% increase on its revenue over the past 12 months. Before this earnings report, the analysts had been forecasting revenues of R$4.09b and earnings per share (EPS) of R$6.43 in 2024. Overall, while there's been a small dip in revenue estimates, the consensus now no longer provides an EPS estimate. This implies that the market believes revenue is more important following the latest results.

We'd also point out that thatthe analysts have made no major changes to their price target of R$31.32. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Petroreconcavo analyst has a price target of R$39.00 per share, while the most pessimistic values it at R$26.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Petroreconcavo'shistorical trends, as the 41% 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 2.0% 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 clear low-light was that the analysts cut their forecast revenue estimates for Petroreconcavo next year. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider industry. The consensus price target held steady at R$31.32, with the latest estimates not enough to have an impact on their price targets.

At least one of Petroreconcavo's seven analysts has provided estimates out to 2026, which can be seen for free on our platform here.

Even so, be aware that Petroreconcavo is showing 3 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.