AES Brasil Energia S.A. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

AES Brasil Energia S.A. (BVMF:AESB3) shareholders are probably feeling a little disappointed, since its shares fell 2.5% to R$11.39 in the week after its latest second-quarter results. It looks like a pretty bad result, all things considered. Although revenues of R$763m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 90% to hit R$0.013 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for AES Brasil Energia

Taking into account the latest results, the nine analysts covering AES Brasil Energia provided consensus estimates of R$2.81b revenue in 2023, which would reflect an uncomfortable 9.3% decline over the past 12 months. Per-share earnings are expected to surge 141% to R$0.58. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$3.09b and earnings per share (EPS) of R$0.65 in 2023. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The analysts made no major changes to their price target of R$11.30, suggesting the downgrades are not expected to have a long-term impact on AES Brasil Energia's valuation. 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. Currently, the most bullish analyst values AES Brasil Energia at R$14.00 per share, while the most bearish prices it at R$9.00. 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 AES Brasil Energia shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 18% annualised decline to the end of 2023. That is a notable change from historical growth of 15% over the last year. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 3.5% per year. The forecasts do look bearish for AES Brasil Energia, since they're expecting it to shrink faster than the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for AES Brasil Energia. Unfortunately they also downgraded their revenue estimates, and our analysts estimates suggest that AES Brasil Energia is still expected to perform worse than the wider industry. The consensus price target held steady at R$11.30, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on AES Brasil Energia. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for AES Brasil Energia going out to 2025, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 3 warning signs for AES Brasil Energia (1 is a bit concerning!) that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.