Lavvi Empreendimentos Imobiliários S.A. (BVMF:LAVV3) Analysts Just Slashed This Year's Revenue Estimates By 11%

The analysts covering Lavvi Empreendimentos Imobiliários S.A. (BVMF:LAVV3) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the latest consensus from Lavvi Empreendimentos Imobiliários' three analysts is for revenues of R$901m in 2023, which would reflect a huge 25% improvement in sales compared to the last 12 months. Per-share earnings are expected to rise 6.0% to R$0.84. Before this latest update, the analysts had been forecasting revenues of R$1.0b and earnings per share (EPS) of R$0.90 in 2023. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a small dip in EPS estimates to boot.

Check out our latest analysis for Lavvi Empreendimentos Imobiliários

The average price target climbed 6.4% to R$10.04 despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

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. The analysts are definitely expecting Lavvi Empreendimentos Imobiliários' growth to accelerate, with the forecast 57% annualised growth to the end of 2023 ranking favourably alongside historical growth of 25% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Lavvi Empreendimentos Imobiliários to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Lavvi Empreendimentos Imobiliários going forwards.

That said, the analysts might have good reason to be negative on Lavvi Empreendimentos Imobiliários, given concerns around earnings quality. For more information, you can click here to discover this and the 1 other flag we've identified.

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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.