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

Today is shaping up negative for Helbor Empreendimentos S.A. (BVMF:HBOR3) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the most recent consensus for Helbor Empreendimentos from its three analysts is for revenues of R$1.4b in 2022 which, if met, would be a substantial 37% increase on its sales over the past 12 months. Statutory earnings per share are forecast to be R$0.79, approximately in line with the last 12 months. Before this latest update, the analysts had been forecasting revenues of R$1.7b and earnings per share (EPS) of R$1.51 in 2022. Indeed, we can see that the analysts are a lot more bearish about Helbor Empreendimentos' prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Helbor Empreendimentos

It'll come as no surprise then, to learn that the analysts have cut their price target 25% to R$9.03. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Helbor Empreendimentos, with the most bullish analyst valuing it at R$11.00 and the most bearish at R$7.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. The analysts are definitely expecting Helbor Empreendimentos' growth to accelerate, with the forecast 29% annualised growth to the end of 2022 ranking favourably alongside historical growth of 9.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Helbor Empreendimentos 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. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Helbor Empreendimentos.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Helbor Empreendimentos going out to 2024, and you can see them free on our platform here.

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.