Companhia Brasileira de Alumínio (BVMF:CBAV3) Released Earnings Last Week And Analysts Lifted Their Price Target To R$5.71

Last week saw the newest quarterly earnings release from Companhia Brasileira de Alumínio (BVMF:CBAV3), an important milestone in the company's journey to build a stronger business. Revenues of R$1.7b came in a modest 5.0% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of R$0.087 coming in a substantial 58% smaller than what the analysts had expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Companhia Brasileira de Alumínio after the latest results.

Check out our latest analysis for Companhia Brasileira de Alumínio

Taking into account the latest results, the current consensus from Companhia Brasileira de Alumínio's six analysts is for revenues of R$7.37b in 2024. This would reflect an okay 3.5% increase on its revenue over the past 12 months. Before this earnings announcement, the analysts had been modelling revenues of R$7.62b and losses of R$0.41 per share in 2024. So we can see that while the consensus made a small dip in revenue estimates, it no longer provides an earnings per share estimate. This suggests that the market is now more focused on revenue after the latest result.

The average price target rose 6.1% to R$5.71, with the analysts clearly having become more optimistic about Companhia Brasileira de Alumínio'sprospects following these results. 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. Currently, the most bullish analyst values Companhia Brasileira de Alumínio at R$7.00 per share, while the most bearish prices it at R$4.50. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Companhia Brasileira de Alumínio's growth to accelerate, with the forecast 4.6% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.5% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Companhia Brasileira de Alumínio is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their revenue estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

We have estimates for Companhia Brasileira de Alumínio from its six analysts out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Companhia Brasileira de Alumínio (2 are concerning!) that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.