Hidrovias do Brasil S.A. Just Missed Earnings; Here's What Analysts Are Forecasting Now

Investors in Hidrovias do Brasil S.A. (BVMF:HBSA3) had a good week, as its shares rose 6.9% to close at R$5.61 following the release of its yearly results. The results don't look great, especially considering that the analysts had been forecasting a profit and Hidrovias do Brasil delivered a statutory loss of R$0.14 per share. Revenues of R$1.5b did beat expectations by 4.4% though. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Hidrovias do Brasil

Following the latest results, Hidrovias do Brasil's seven analysts are now forecasting revenues of R$1.80b in 2021. This would be a huge 23% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Hidrovias do Brasil forecast to report a statutory profit of R$0.27 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$1.78b and earnings per share (EPS) of R$0.45 in 2021. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

The consensus price target held steady at R$9.64, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Hidrovias do Brasil at R$11.00 per share, while the most bearish prices it at R$8.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Hidrovias do Brasil shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hidrovias do Brasil's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Hidrovias do Brasil'shistorical trends, as the 23% annualised revenue growth to the end of 2021 is roughly in line with the 25% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.4% annually. So although Hidrovias do Brasil is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hidrovias do Brasil. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Hidrovias do Brasil. Long-term earnings power is much more important than next year's profits. We have forecasts for Hidrovias do Brasil going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - Hidrovias do Brasil has 2 warning signs (and 1 which shouldn't be ignored) we think 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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