EcoRodovias Infraestrutura e Logística S.A. Just Recorded A 34% EPS Beat: Here's What Analysts Are Forecasting Next

EcoRodovias Infraestrutura e Logística S.A. (BVMF:ECOR3) shareholders are probably feeling a little disappointed, since its shares fell 7.5% to R$10.91 in the week after its latest quarterly results. Revenues of R$1.3b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of R$0.22 an impressive 34% ahead of estimates. 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.

View our latest analysis for EcoRodovias Infraestrutura e Logística

Taking into account the latest results, the current consensus from EcoRodovias Infraestrutura e Logística's nine analysts is for revenues of R$5.35b in 2021, which would reflect a huge 27% increase on its sales over the past 12 months. EcoRodovias Infraestrutura e Logística is also expected to turn profitable, with statutory earnings of R$0.69 per share. Before this earnings report, the analysts had been forecasting revenues of R$5.35b and earnings per share (EPS) of R$0.72 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at R$15.33, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic EcoRodovias Infraestrutura e Logística analyst has a price target of R$20.00 per share, while the most pessimistic values it at R$8.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the EcoRodovias Infraestrutura e Logística's past performance and to peers in the same industry. It's clear from the latest estimates that EcoRodovias Infraestrutura e Logística's rate of growth is expected to accelerate meaningfully, with the forecast 60% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 9.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect EcoRodovias Infraestrutura e Logística to grow faster than the wider industry.

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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at R$15.33, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for EcoRodovias Infraestrutura e Logística going out to 2023, and you can see them free on our platform here.

You still need to take note of risks, for example - EcoRodovias Infraestrutura e Logística has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

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