3R Petroleum Óleo e Gás S.A. (BVMF:RRRP3) Analysts Just Slashed This Year's Estimates

The latest analyst coverage could presage a bad day for 3R Petroleum Óleo e Gás S.A. (BVMF:RRRP3), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

After the downgrade, the ten analysts covering 3R Petroleum Óleo e Gás are now predicting revenues of R$4.4b in 2023. If met, this would reflect a huge 85% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 35% to R$2.69. Prior to this update, the analysts had been forecasting revenues of R$5.0b and earnings per share (EPS) of R$3.10 in 2023. Indeed, we can see that the analysts are a lot more bearish about 3R Petroleum Óleo e Gás' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for 3R Petroleum Óleo e Gás

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. It's clear from the latest estimates that 3R Petroleum Óleo e Gás' rate of growth is expected to accelerate meaningfully, with the forecast 242% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 81% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 1.4% per year. So it's clear with the acceleration in growth, 3R Petroleum Óleo e Gás is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on 3R Petroleum Óleo e Gás, and their negativity could be grounds for caution.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with 3R Petroleum Óleo e Gás' financials, such as dilutive stock issuance over the past year. For more information, you can click here to discover this and the 1 other risk we've identified.

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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.