Eneva S.A. Just Missed EPS By 68%: Here's What Analysts Think Will Happen Next

It's been a good week for Eneva S.A. (BVMF:ENEV3) shareholders, because the company has just released its latest yearly results, and the shares gained 2.7% to R$12.85. Revenue of R$10b surpassed estimates by 9.5%, although statutory earnings per share missed badly, coming in 68% below expectations at R$0.14 per share. 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.

View our latest analysis for Eneva

Taking into account the latest results, the six analysts covering Eneva provided consensus estimates of R$7.70b revenue in 2024, which would reflect a substantial 24% decline over the past 12 months. Statutory earnings per share are predicted to soar 325% to R$0.58. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$8.29b and earnings per share (EPS) of R$0.61 in 2024. 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.

Despite the cuts to forecast earnings, there was no real change to the R$15.48 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Eneva, with the most bullish analyst valuing it at R$17.34 and the most bearish at R$14.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Eneva is an easy business to forecast or the the analysts are all using similar assumptions.

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 revenue is expected to slow, with a forecast annualised decline of 24% by the end of 2024. This indicates a significant reduction from annual growth of 27% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 1.7% annually for the foreseeable future. The forecasts do look bearish for Eneva, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately they also cut their revenue estimates for next year. Forecasts imply the business' revenue is expected to perform worse than the wider industry. That said, earnings per share are more important for creating value for shareholders. The consensus price target held steady at R$15.48, 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 Eneva going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Eneva you should be aware of, and 1 of them is potentially serious.

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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.