Industry Analysts Just Upgraded Their Suzano S.A. (BVMF:SUZB3) Revenue Forecasts By 7.4%

Suzano S.A. (BVMF:SUZB3) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following this upgrade, Suzano's eleven analysts are forecasting 2022 revenues to be R$41b, approximately in line with the last 12 months. Statutory earnings per share are supposed to descend 15% to R$5.46 in the same period. Prior to this update, the analysts had been forecasting revenues of R$39b and earnings per share (EPS) of R$3.50 in 2022. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a considerable lift to earnings per share in particular.

Check out our latest analysis for Suzano

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of R$78.08, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Suzano, with the most bullish analyst valuing it at R$92.00 and the most bearish at R$58.00 per share. This shows there is still some 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Suzano's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Suzano's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 1.2% growth on an annualised basis. This is compared to a historical growth rate of 31% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that Suzano is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Suzano.

Analysts are definitely bullish on Suzano, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including a weak balance sheet. For more information, you can click through to our platform to learn more about this and the 2 other warning signs we've identified .

You can also see our analysis of Suzano's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.