Equatorial Energia S.A. (BVMF:EQTL3) Annual Results: Here's What Analysts Are Forecasting For This Year

Shareholders might have noticed that Equatorial Energia S.A. (BVMF:EQTL3) filed its yearly result this time last week. The early response was not positive, with shares down 2.6% to R$32.55 in the past week. Revenues were R$41b, and Equatorial Energia came in a solid 13% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Equatorial Energia

Taking into account the latest results, the twelve analysts covering Equatorial Energia provided consensus estimates of R$35.7b revenue in 2024, which would reflect a not inconsiderable 13% decline over the past 12 months. Per-share earnings are expected to surge 39% to R$2.51. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$35.7b and earnings per share (EPS) of R$2.76 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at R$39.75, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Equatorial Energia at R$43.67 per share, while the most bearish prices it at R$34.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 13% by the end of 2024. This indicates a significant reduction from annual growth of 22% 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. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Equatorial Energia is expected to lag the wider 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at R$39.75, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Equatorial Energia going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for Equatorial Energia (1 is significant!) that you should be aware of.

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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.