Need To Know: The Consensus Just Cut Its Companhia de Saneamento Básico do Estado de São Paulo - SABESP (BVMF:SBSP3) Estimates For 2025

The analysts covering Companhia de Saneamento Básico do Estado de São Paulo - SABESP (BVMF:SBSP3) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

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Following the latest downgrade, the current consensus, from the eleven analysts covering Companhia de Saneamento Básico do Estado de São Paulo - SABESP, is for revenues of R$27b in 2025, which would reflect a substantial 28% reduction in Companhia de Saneamento Básico do Estado de São Paulo - SABESP's sales over the past 12 months. Before the latest update, the analysts were foreseeing R$31b of revenue in 2025. The consensus view seems to have become more pessimistic on Companhia de Saneamento Básico do Estado de São Paulo - SABESP, noting the substantial drop in revenue estimates in this update.

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

We'd point out that there was no major changes to their price target of R$130, suggesting the latest estimates were not enough to shift their view on the value of 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 sales are expected to reverse, with a forecast 35% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 15% 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 5.1% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Companhia de Saneamento Básico do Estado de São Paulo - SABESP is expected to lag the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Companhia de Saneamento Básico do Estado de São Paulo - SABESP this year. They're also anticipating slower revenue growth than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Companhia de Saneamento Básico do Estado de São Paulo - SABESP after today.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Companhia de Saneamento Básico do Estado de São Paulo - SABESP's business, like a weak balance sheet. Learn more, and discover the 1 other risk we've identified, for free on our platform here.

We also provide an overview of the Companhia de Saneamento Básico do Estado de São Paulo - SABESP Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.