Market forces rained on the parade of Hidrovias do Brasil S.A. (BVMF:HBSA3) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the downgrade, the latest consensus from Hidrovias do Brasil's six analysts is for revenues of R$1.6b in 2021, which would reflect a reasonable 5.4% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of R$1.7b in 2021. It looks like the analysts have become a bit less bullish on Hidrovias do Brasil, given the slight decrease in revenue estimates after the latest consensus updates.
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. It's pretty clear that there is an expectation that Hidrovias do Brasil's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 2.8% annually. Factoring in the forecast slowdown in growth, it's pretty clear that Hidrovias do Brasil is still expected to grow faster than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Hidrovias do Brasil this year. They're also forecasting for revenues to perform better than companies in the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Hidrovias do Brasil after today.
Want more information? We have estimates for Hidrovias do Brasil from its six analysts out until 2023, and you can see them 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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