Auren Energia S.A. Beat Revenue Forecasts By 49%: Here's What Analysts Are Forecasting Next

Auren Energia S.A. (BVMF:AURE3) just released its latest first-quarter results and things are looking bullish. Statutory revenue and earnings both blasted past expectations, with revenue of R$1.4b beating expectations by 49% and earnings per share (EPS) reaching R$0.23, some 39% ahead of expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Auren Energia after the latest results.

View our latest analysis for Auren Energia

After the latest results, the consensus from Auren Energia's ten analysts is for revenues of R$5.23b in 2023, which would reflect an uncomfortable 9.6% decline in sales compared to the last year of performance. In the lead-up to this report, the analysts had been modelling revenues of R$3.86b and earnings per share (EPS) of R$0.62 in 2023. What's really interesting is that while the consensus made a great increase in revenue estimates, it no longer provides an earnings per share estimate, suggesting that - following the latest results - the market believes revenue is more important.

Additionally, the consensus price target for Auren Energia rose 9.1% to R$17.55, showing a clear increase in optimism from the the analysts involved. 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 Auren Energia at R$23.00 per share, while the most bearish prices it at R$15.74. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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 sales are expected to reverse, with a forecast 13% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 86% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 0.4% annually for the foreseeable future. The forecasts do look bearish for Auren Energia, since they're expecting it to shrink faster than the industry.

The Bottom Line

The highlight for us was that the analysts increased their revenue forecasts for Auren Energia next year. They also upgraded their revenue estimates, with sales apparently performing well, although revenues are expected to lag the wider industry this year. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

At least one of Auren Energia's ten analysts has provided estimates out to 2025, which can be seen for free on our platform here.

Even so, be aware that Auren Energia is showing 3 warning signs in our investment analysis , and 2 of those are a bit unpleasant...

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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.