Companhia Brasileira de Alumínio (BVMF:CBAV3) Just Reported Earnings, And Analysts Cut Their Target Price

Last week, you might have seen that Companhia Brasileira de Alumínio (BVMF:CBAV3) released its quarterly result to the market. The early response was not positive, with shares down 7.0% to R$3.72 in the past week. The results were mixed overall, with revenues slightly ahead of analyst estimates at R$1.9b. Statutory losses by contrast were 7.5% larger than predictions at R$0.49 per share. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Companhia Brasileira de Alumínio

Taking into account the latest results, the most recent consensus for Companhia Brasileira de Alumínio from seven analysts is for revenues of R$8.03b in 2024. If met, it would imply a decent 8.5% increase on its revenue over the past 12 months. Before this earnings announcement, the analysts had been modelling revenues of R$8.34b and losses of R$0.20 per share 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.

The average price target fell 20% to R$5.91, withthe analysts clearly having become less optimistic about Companhia Brasileira de Alumínio'sprospects following its latest earnings. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Companhia Brasileira de Alumínio at R$8.10 per share, while the most bearish prices it at R$5.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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 pretty clear that there is an expectation that Companhia Brasileira de Alumínio's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.8% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 0.9% annually. Even after the forecast slowdown in growth, it seems obvious that Companhia Brasileira de Alumínio is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their revenue estimates for next year. They also downgraded Companhia Brasileira de Alumínio's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Companhia Brasileira de Alumínio's future valuation.

We have estimates for Companhia Brasileira de Alumínio from its seven analysts out to 2025, and you can see them free on our platform here.

Even so, be aware that Companhia Brasileira de Alumínio 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.