Revenue Beat: Equatorial S.A. Beat Analyst Estimates By 28%

A week ago, Equatorial S.A. (BVMF:EQTL3) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. Statutory earnings beat expectations, with revenues of R$12b coming in a massive 28% ahead of forecasts, while earnings per share (eps) of R$0.44 beat expectations by 6.7%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Equatorial after the latest results.

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Taking into account the latest results, the current consensus, from the ten analysts covering Equatorial, is for revenues of R$39.5b in 2025. This implies a definite 16% reduction in Equatorial's revenue over the past 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$38.2b and earnings per share (EPS) of R$2.54 in 2025. What's really interesting is that while the consensus made a small increase to revenue estimates, it no longer provides an earnings per share estimate. This suggests that revenues are now the focus of the business after this latest result.

See our latest analysis for Equatorial

There's been no real change to the consensus price target of R$43.01, with Equatorial seemingly executing in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Equatorial, with the most bullish analyst valuing it at R$50.10 and the most bearish at R$34.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 21% annualised decline to the end of 2025. That is a notable change from historical growth of 22% 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. So it's pretty clear that Equatorial's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The highlight for us was that the analysts increased their revenue forecasts for Equatorial next year. Fortunately, they also upgraded their revenue estimates, although Equatorial'sthey are still expected to trail the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

We have estimates for Equatorial from its ten analysts out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Equatorial that we have uncovered.

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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.