CPFL Energia S.A. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

CPFL Energia S.A. (BVMF:CPFE3) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 4.0% to hit R$10b. CPFL Energia also reported a statutory profit of R$1.45, which was an impressive 36% above what the analysts had forecast. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for CPFL Energia

Taking into account the latest results, the current consensus, from the eight analysts covering CPFL Energia, is for revenues of R$38.3b in 2024. This implies a noticeable 4.3% reduction in CPFL Energia's revenue over the past 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$39.2b and earnings per share (EPS) of R$4.00 in 2024. Overall, while there's been a small dip in revenue estimates, the consensus now no longer provides an EPS estimate. This implies that the market believes revenue is more important following the latest results.

There's been no real change to the consensus price target of R$39.62, with CPFL Energia seemingly executing in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic CPFL Energia analyst has a price target of R$49.00 per share, while the most pessimistic values it at R$35.00. 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.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 5.7% by the end of 2024. This indicates a significant reduction from annual growth of 8.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CPFL Energia is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their revenue estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates it is expected to perform worse 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.

At least one of CPFL Energia's eight analysts has provided estimates out to 2026, which can be seen for free on our platform here.

Even so, be aware that CPFL Energia is showing 3 warning signs in our investment analysis , and 1 of those is significant...

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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.