Analysts Just Made A Captivating Upgrade To Their Eneva S.A. (BVMF:ENEV3) Forecasts

Eneva S.A. (BVMF:ENEV3) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The stock price has risen 5.4% to R$14.55 over the past week, suggesting investors are becoming more optimistic. Could this big upgrade push the stock even higher?

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After the upgrade, the consensus from Eneva's seven analysts is for revenues of R$10b in 2025, which would reflect a disturbing 25% decline in sales compared to the last year of performance. Per-share earnings are expected to soar 297% to R$1.00. Before this latest update, the analysts had been forecasting revenues of R$8.7b and earnings per share (EPS) of R$0.90 in 2025. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Eneva

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of R$15.92, suggesting that the forecast performance does not have a long term impact on the company's valuation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 32% by the end of 2025. This indicates a significant reduction from annual growth of 29% 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 0.9% per year. It's pretty clear that Eneva's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Eneva could be a good candidate for more research.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential flag with Eneva, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 1 other flag we've identified .

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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.