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

Investors in AES Brasil Energia S.A. (BVMF:AESB3) had a good week, as its shares rose 3.1% to close at R$9.51 following the release of its quarterly results. Revenues beat expectations by 18% to hit R$829m, although earnings fell badly short, with AES Brasil Energia reported a statutory loss of R$0.18 per share even though the analysts had been forecasting a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for AES Brasil Energia

Taking into account the latest results, AES Brasil Energia's ten analysts currently expect revenues in 2024 to be R$3.53b, approximately in line with the last 12 months. Per-share earnings are expected to jump 2,143% to R$0.51. In the lead-up to this report, the analysts had been modelling revenues of R$3.73b and earnings per share (EPS) of R$0.47 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a solid gain to their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

The consensus has made no major changes to the price target of R$11.12, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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. Currently, the most bullish analyst values AES Brasil Energia at R$13.50 per share, while the most bearish prices it at R$9.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the AES Brasil Energia's past performance and to peers in the same industry. It's pretty clear that there is an expectation that AES Brasil Energia's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.2% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 1.3% per year. So it's clear that despite the slowdown in growth, AES Brasil Energia is still expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards AES Brasil Energia following these results. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider industry. Still, earnings are more important to the intrinsic value of the business. 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 AES Brasil Energia. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple AES Brasil Energia analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with AES Brasil Energia (at least 1 which can't be ignored) , and understanding these should be part of your investment process.

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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.