Time To Worry? Analysts Just Downgraded Their LOG Commercial Properties e Participações S.A. (BVMF:LOGG3) Outlook

Market forces rained on the parade of LOG Commercial Properties e Participações S.A. (BVMF:LOGG3) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following this downgrade, LOG Commercial Properties e Participações' six analysts are forecasting 2024 revenues to be R$231m, approximately in line with the last 12 months. Statutory earnings per share are supposed to plummet 21% to R$1.51 in the same period. Prior to this update, the analysts had been forecasting revenues of R$274m and earnings per share (EPS) of R$1.03 in 2024. Thus, there's been a definite swing in sentiment, with the analysts making a considerable reduction to this year's revenue estimates, while at the same time substantially upgrading EPS. It's almost as though the business is forecast to reduce its focus on growth to enhance profitability.

Check out our latest analysis for LOG Commercial Properties e Participações

The consensus has made no major changes to the price target of R$27.72, suggesting the forecast improvement in earnings is expected to offset the decline in revenues this year.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that LOG Commercial Properties e Participações' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.8% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% per year. Factoring in the forecast slowdown in growth, it seems obvious that LOG Commercial Properties e Participações is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that LOG Commercial Properties e Participações' revenues are expected to grow slower 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 LOG Commercial Properties e Participações after today.

There might be good reason for analyst bearishness towards LOG Commercial Properties e Participações, like its declining profit margins. For more information, you can click here to discover this and the 3 other warning signs we've identified.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.