What Does The Future Hold For Eneva S.A. (BVMF:ENEV3)? These Analysts Have Been Cutting Their Estimates

The analysts covering Eneva S.A. (BVMF:ENEV3) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the current consensus from Eneva's five analysts is for revenues of R$8.9b in 2023 which - if met - would reflect a meaningful 13% increase on its sales over the past 12 months. Statutory earnings per share are presumed to soar 233% to R$0.87. Previously, the analysts had been modelling revenues of R$10b and earnings per share (EPS) of R$0.87 in 2023. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a measurable cut to revenues and reconfirming their earnings per share estimates.

See our latest analysis for Eneva

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 18% growth on an annualised basis. That is in line with its 18% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 2.4% annually. So not only is Eneva expected to maintain its revenue growth despite the wider downturn, it's also forecast to grow faster than the industry as a whole.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Eneva going forwards.

There might be good reason for analyst bearishness towards Eneva, like its declining profit margins. Learn more, and discover the 3 other flags we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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