Helbor Empreendimentos S.A.'s (BVMF:HBOR3) Analyst Just Slashed This Year's Estimates

The analyst covering Helbor Empreendimentos S.A. (BVMF:HBOR3) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

After this downgrade, Helbor Empreendimentos' one analyst is now forecasting revenues of R$1.1b in 2023. This would be a reasonable 2.5% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to plunge 62% to R$0.12 in the same period. Previously, the analyst had been modelling revenues of R$1.3b and earnings per share (EPS) of R$0.27 in 2023. Indeed, we can see that the analyst is a lot more bearish about Helbor Empreendimentos' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Helbor Empreendimentos

The average price target climbed 18% to R$4.23 despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Helbor Empreendimentos' past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Helbor Empreendimentos'historical trends, as the 5.2% annualised revenue growth to the end of 2023 is roughly in line with the 4.6% annual revenue growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 11% annually. So although Helbor Empreendimentos is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The rising price target is a puzzle, but still - with a serious cut to this year's outlook, we wouldn't be surprised if investors were a bit wary of Helbor Empreendimentos.

That said, this analyst might have good reason to be negative on Helbor Empreendimentos, given its declining profit margins. For more information, you can click here to discover this and the 5 other warning signs we've identified.

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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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.