Time To Worry? Analysts Just Downgraded Their CSN Mineração S.A. (BVMF:CMIN3) Outlook

Market forces rained on the parade of CSN Mineração S.A. (BVMF:CMIN3) shareholders today, when the analysts downgraded their 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 latest downgrade, the nine analysts covering CSN Mineração provided consensus estimates of R$16b revenue in 2022, which would reflect an uneasy 9.0% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing R$19b of revenue in 2022. The consensus view seems to have become more pessimistic on CSN Mineração, noting the measurable cut to revenue estimates in this update.

See our latest analysis for CSN Mineração

We'd point out that there was no major changes to their price target of R$6.60, suggesting the latest estimates were not enough to shift their view on the value of the business. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on CSN Mineração, with the most bullish analyst valuing it at R$9.00 and the most bearish at R$5.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CSN Mineração's past performance and to peers in the same industry. Over the past year, revenues have declined around 1.8% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 12% decline in revenue until the end of 2022. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue shrink 6.4% per year. While this is interesting, CSN Mineração's, revenues are still expected to shrink next year, and at a faster rate than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for CSN Mineração this year. Analysts also expect revenues to shrink faster than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on CSN Mineração 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 CSN Mineração's financials, such as the risk of cutting its dividend. Learn more, and discover the 1 other warning sign we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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