What You Need To Know About The Méliuz S.A. (BVMF:CASH3) Analyst Downgrade Today

One thing we could say about the analysts on Méliuz S.A. (BVMF:CASH3) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the consensus from three analysts covering Méliuz is for revenues of R$352m in 2023, implying a small 2.7% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing R$450m of revenue in 2023. The consensus view seems to have become more pessimistic on Méliuz, noting the pretty serious reduction to revenue estimates in this update.

View our latest analysis for Méliuz

The consensus price target fell 19% to R$11.60, with the analysts clearly less optimistic about Méliuz's valuation following this update.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 5.3% by the end of 2023. This indicates a significant reduction from annual growth of 43% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 10% per year. It's pretty clear that Méliuz's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Méliuz this year. They also expect company revenue to perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Méliuz's future valuation. 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 Méliuz after today.

Of course, this isn't the full story. We have estimates for Méliuz from its three analysts out until 2025, and you can see them 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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