Neoenergia S.A. Just Beat EPS By 502%: Here's What Analysts Think Will Happen Next

Neoenergia S.A. (BVMF:NEOE3) investors will be delighted, with the company turning in some strong numbers with its latest results. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 16% higher than the analysts had forecast, at R$12b, while EPS were R$1.34 beating analyst models by 502%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following the recent earnings report, the consensus from eight analysts covering Neoenergia is for revenues of R$42.8b in 2025. This implies a considerable 16% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to dive 42% to R$2.08 in the same period. In the lead-up to this report, the analysts had been modelling revenues of R$43.7b and earnings per share (EPS) of R$2.26 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

See our latest analysis for Neoenergia

The analysts made no major changes to their price target of R$31.34, suggesting the downgrades are not expected to have a long-term impact on Neoenergia's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Neoenergia, with the most bullish analyst valuing it at R$40.00 and the most bearish at R$24.10 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. We would highlight that revenue is expected to reverse, with a forecast 29% annualised decline to the end of 2025. That is a notable change from historical growth of 8.6% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 1.3% per year. So it's pretty clear that Neoenergia's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Neoenergia. Unfortunately they also cut their revenue estimates for next year. Forecasts imply the business' revenue is expected to perform worse than the wider industry. That said, earnings per share are more important for creating value for shareholders. The consensus price target held steady at R$31.34, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Neoenergia analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that Neoenergia is showing 3 warning signs in our investment analysis , and 2 of those shouldn'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.