Companhia de Saneamento de Minas Gerais (BVMF:CSMG3) Second-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

A week ago, Companhia de Saneamento de Minas Gerais (BVMF:CSMG3) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Results were good overall, with revenues beating analyst predictions by 4.5% to hit R$2.0b. Statutory earnings per share (EPS) came in at R$0.76, some 4.2% above whatthe analysts had expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the nine analysts covering Companhia de Saneamento de Minas Gerais provided consensus estimates of R$7.52b revenue in 2025, which would reflect a discernible 3.2% decline over the past 12 months. Statutory earnings per share are forecast to shrink 4.6% to R$3.42 in the same period. In the lead-up to this report, the analysts had been modelling revenues of R$8.08b and earnings per share (EPS) of R$3.49 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

See our latest analysis for Companhia de Saneamento de Minas Gerais

Despite the cuts to forecast earnings, there was no real change to the R$25.25 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Companhia de Saneamento de Minas Gerais analyst has a price target of R$31.10 per share, while the most pessimistic values it at R$21.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 6.3% annualised decline to the end of 2025. That is a notable change from historical growth of 9.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Companhia de Saneamento de Minas Gerais is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Companhia de Saneamento de Minas Gerais. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Companhia de Saneamento de Minas Gerais going out to 2027, 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 3 warning signs with Companhia de Saneamento de Minas Gerais (at least 1 which is a bit unpleasant) , and understanding them 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.