Growth Investors: Industry Analysts Just Upgraded Their Neoenergia S.A. (BVMF:NEOE3) Revenue Forecasts By 17%

Neoenergia S.A. (BVMF:NEOE3) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that Neoenergia will make substantially more sales than they'd previously expected. Investor sentiment seems to be improving too, with the share price up 6.3% to R$21.84 over the past 7 days. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the current consensus from Neoenergia's eight analysts is for revenues of R$32b in 2020 which - if met - would reflect a notable 12% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing R$27b of revenue in 2020. The consensus has definitely become more optimistic, showing a nice increase in revenue forecasts.

View our latest analysis for Neoenergia

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Neoenergia's revenue growth will slow down substantially, with revenues next year expected to grow 12%, compared to a historical growth rate of 18% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 1.9% next year. So it's pretty clear that, while Neoenergia's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They're also forecasting more rapid revenue growth than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Neoenergia.

Unanswered questions? At least one of Neoenergia's eight analysts has provided estimates out to 2024, which can be seen 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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