What You Need To Know About The Omega Energia S.A. (BVMF:MEGA3) Analyst Downgrade Today

One thing we could say about the analysts on Omega Energia S.A. (BVMF:MEGA3) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the current consensus, from the five analysts covering Omega Energia, is for revenues of R$1.6b in 2023, which would reflect a substantial 36% reduction in Omega Energia's sales over the past 12 months. Before the latest update, the analysts were foreseeing R$1.9b of revenue in 2023. It looks like forecasts have become a fair bit less optimistic on Omega Energia, given the measurable cut to revenue estimates.

View our latest analysis for Omega Energia

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 sales are expected to slow, with a forecast annualised revenue decline of 45% by the end of 2023. This indicates a significant reduction from annual growth of 11% 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 0.4% annually for the foreseeable future. So it's pretty clear that Omega Energia's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Omega Energia this year. They're also forecasting for revenues to shrink at a quicker rate than companies in the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Omega Energia after today.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Omega Energia's financials, such as dilutive stock issuance over the past year. For more information, you can click here to discover this and the 1 other warning sign we've identified.

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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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.