Industry Analysts Just Upgraded Their Companhia de Saneamento Básico do Estado de São Paulo - SABESP (BVMF:SBSP3) Revenue Forecasts By 19%

Celebrations may be in order for Companhia de Saneamento Básico do Estado de São Paulo - SABESP (BVMF:SBSP3) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

Following the latest upgrade, the current consensus, from the nine analysts covering Companhia de Saneamento Básico do Estado de São Paulo - SABESP, is for revenues of R$17b in 2021, which would reflect a discernible 5.3% reduction in Companhia de Saneamento Básico do Estado de São Paulo - SABESP's sales over the past 12 months. Per-share earnings are expected to surge 48% to R$4.62. Previously, the analysts had been modelling revenues of R$15b and earnings per share (EPS) of R$4.16 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Companhia de Saneamento Básico do Estado de São Paulo - SABESP

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 7.0% by the end of 2021. This indicates a significant reduction from annual growth of 7.7% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.6% per year. It's pretty clear that Companhia de Saneamento Básico do Estado de São Paulo - SABESP's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower 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 Companhia de Saneamento Básico do Estado de São Paulo - SABESP.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Companhia de Saneamento Básico do Estado de São Paulo - SABESP analysts - going out to 2023, and you can see them free on our platform here.

You can also see our analysis of Companhia de Saneamento Básico do Estado de São Paulo - SABESP's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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