These Analysts Think 3R Petroleum Óleo e Gás S.A.'s (BVMF:RRRP3) Sales Are Under Threat

The analysts covering 3R Petroleum Óleo e Gás S.A. (BVMF:RRRP3) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory 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 the downgrade, the current consensus from 3R Petroleum Óleo e Gás' eleven analysts is for revenues of R$4.5b in 2023 which - if met - would reflect a sizeable 91% increase on its sales over the past 12 months. Statutory earnings per share are presumed to shoot up 61% to R$3.22. Before this latest update, the analysts had been forecasting revenues of R$5.2b and earnings per share (EPS) of R$3.22 in 2023. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a measurable cut to revenues and reconfirming their earnings per share estimates.

Check out our latest analysis for 3R Petroleum Óleo e Gás

The average price target was steady at R$60.24 even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the 3R Petroleum Óleo e Gás' past performance and to peers in the same industry. The analysts are definitely expecting 3R Petroleum Óleo e Gás' growth to accelerate, with the forecast 265% annualised growth to the end of 2023 ranking favourably alongside historical growth of 81% per annum 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 1.0% per year. It seems obvious that as part of the brighter growth outlook, 3R Petroleum Óleo e Gás is expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on 3R Petroleum Óleo e Gás after today.

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 concerns around earnings quality. 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.