Growth Investors: Industry Analysts Just Upgraded Their EcoRodovias Infraestrutura e Logística S.A. (BVMF:ECOR3) Revenue Forecasts By 12%

EcoRodovias Infraestrutura e Logística S.A. (BVMF:ECOR3) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following this upgrade, EcoRodovias Infraestrutura e Logística's eight analysts are forecasting 2021 revenues to be R$4.0b, approximately in line with the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of R$0.84 per share this year. Prior to this update, the analysts had been forecasting revenues of R$3.6b and earnings per share (EPS) of R$0.79 in 2021. The forecasts seem more optimistic now, with a nice increase in revenue and a modest lift to earnings per share estimates.

Check out our latest analysis for EcoRodovias Infraestrutura e Logística

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of R$15.18, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. Currently, the most bullish analyst values EcoRodovias Infraestrutura e Logística at R$20.00 per share, while the most bearish prices it at R$8.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 0.8% by the end of 2021. This indicates a significant reduction from annual growth of 9.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 10.0% annually for the foreseeable future. It's pretty clear that EcoRodovias Infraestrutura e Logística's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at EcoRodovias Infraestrutura e Logística.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple EcoRodovias Infraestrutura e Logística analysts - going out to 2023, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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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