Neoenergia S.A. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

As you might know, Neoenergia S.A. (BVMF:NEOE3) just kicked off its latest full-year results with some very strong numbers. The company beat forecasts, with revenue of R$44b, some 7.9% above estimates, and statutory earnings per share (EPS) coming in at R$3.68, 31% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Neoenergia

Taking into account the latest results, the current consensus, from the seven analysts covering Neoenergia, is for revenues of R$39.5b in 2024. This implies a chunky 11% reduction in Neoenergia's revenue over the past 12 months. Statutory earnings per share are forecast to tumble 31% to R$2.53 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$41.8b and earnings per share (EPS) of R$2.86 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The analysts made no major changes to their price target of R$26.97, suggesting the downgrades are not expected to have a long-term impact on Neoenergia's valuation. 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. The most optimistic Neoenergia analyst has a price target of R$36.71 per share, while the most pessimistic values it at R$20.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 11% annualised decline to the end of 2024. That is a notable change from historical growth of 13% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.8% annually for the foreseeable future. It's pretty clear that Neoenergia's revenues are expected to perform substantially worse than 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Neoenergia going out to 2025, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 3 warning signs for Neoenergia you should be aware of, and 2 of them can't be ignored.

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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.