CCR S.A. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Investors in CCR S.A. (BVMF:CCRO3) had a good week, as its shares rose 4.4% to close at R$11.74 following the release of its annual results. Results were mixed, with revenues of R$10.0b exceeding expectations, even as statutory earnings per share (EPS) fell badly short. Earnings were R$0.095 per share, -76% short of analyst expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for CCR

After the latest results, the eleven analysts covering CCR are now predicting revenues of R$10.3b in 2021. If met, this would reflect a modest 3.5% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to soar 36% to R$0.44. In the lead-up to this report, the analysts had been modelling revenues of R$9.68b and earnings per share (EPS) of R$0.63 in 2021. So it's pretty clear the analysts have mixed opinions on CCR after the latest results; even though they upped their revenue numbers, it came at the cost of a large cut to per-share earnings expectations.

The consensus price target was unchanged at R$17.11, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic CCR analyst has a price target of R$21.50 per share, while the most pessimistic values it at R$12.70. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting CCR's growth to accelerate, with the forecast 3.5% annualised growth to the end of 2021 ranking favourably alongside historical growth of 2.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 17% per year. So it's clear that despite the acceleration in growth, CCR is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple CCR analysts - going out to 2023, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for CCR (of which 1 is a bit unpleasant!) you should know about.

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This article by Simply Wall St is general in nature. 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.
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