What You Need To Know About The Eneva S.A. (BVMF:ENEV3) Analyst Downgrade Today

Today is shaping up negative for Eneva S.A. (BVMF:ENEV3) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the most recent consensus for Eneva from its three analysts is for revenues of R$4.5b in 2021 which, if met, would be a huge 38% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing R$5.1b of revenue in 2021. It looks like forecasts have become a fair bit less optimistic on Eneva, given the substantial drop in revenue estimates.

View our latest analysis for Eneva

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Eneva's rate of growth is expected to accelerate meaningfully, with the forecast 54% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 12% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 0.7% per year. It seems obvious that as part of the brighter growth outlook, Eneva is expected to grow faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Eneva this year. They're also forecasting for revenues to perform better than companies in 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.

Still got questions? At least one of Eneva's three analysts has provided estimates out to 2023, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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