Earnings Beat: Companhia de Saneamento de Minas Gerais Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Companhia de Saneamento de Minas Gerais (BVMF:CSMG3) just released its latest first-quarter results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 3.0% to hit R$2.0b. Companhia de Saneamento de Minas Gerais reported statutory earnings per share (EPS) R$1.13, which was a notable 19% above what the analysts had forecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the most recent consensus for Companhia de Saneamento de Minas Gerais from nine analysts is for revenues of R$8.50b in 2025. If met, it would imply an okay 5.3% increase on its revenue over the past 12 months. Statutory earnings per share are expected to decrease 8.0% to R$3.38 in the same period. Before this earnings report, the analysts had been forecasting revenues of R$7.60b and earnings per share (EPS) of R$3.52 in 2025. Although revenue sentiment looks to be improving, the analysts have made a small dip in per-share earnings estimates, perhaps acknowledging the investment required to grow the business.

View our latest analysis for Companhia de Saneamento de Minas Gerais

There's been no major changes to the price target of R$24.34, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' 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. The most optimistic Companhia de Saneamento de Minas Gerais analyst has a price target of R$27.80 per share, while the most pessimistic values it at R$21.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Companhia de Saneamento de Minas Gerais is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Companhia de Saneamento de Minas Gerais' revenue growth is expected to slow, with the forecast 7.1% annualised growth rate until the end of 2025 being well below the historical 9.6% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.9% annually. Even after the forecast slowdown in growth, it seems obvious that Companhia de Saneamento de Minas Gerais is also expected to grow faster than 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. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at R$24.34, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. 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..

Before you take the next step you should know about the 3 warning signs for Companhia de Saneamento de Minas Gerais (1 is concerning!) that we have uncovered.

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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.