What You Need To Know About The EcoRodovias Infraestrutura e Logística S.A. (BVMF:ECOR3) Analyst Downgrade Today

The latest analyst coverage could presage a bad day for EcoRodovias Infraestrutura e Logística S.A. (BVMF:ECOR3), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, EcoRodovias Infraestrutura e Logística's eight analysts currently expect revenues in 2021 to be R$4.2b, approximately in line with the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of R$5.4b in 2021. It looks like forecasts have become a fair bit less optimistic on EcoRodovias Infraestrutura e Logística, given the sizeable cut to revenue estimates.

View our latest analysis for EcoRodovias Infraestrutura e Logística

We'd point out that there was no major changes to their price target of R$14.94, suggesting the latest estimates were not enough to shift their view on the value of the business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic EcoRodovias Infraestrutura e Logística analyst has a price target of R$19.00 per share, while the most pessimistic values it at R$8.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 2.3% by the end of 2021. This indicates a significant reduction from annual growth of 9.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 8.2% per year. 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 clear low-light was that analysts slashing their revenue forecasts for EcoRodovias Infraestrutura e Logística this year. They're also anticipating slower revenue growth than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on EcoRodovias Infraestrutura e Logística after today.

That said, the analysts might have good reason to be negative on EcoRodovias Infraestrutura e Logística, given dilutive stock issuance over the past year. Learn more, and discover the 2 other flags we've identified, for 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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