Need To Know: The Consensus Just Cut Its Serena Energia S.A. (BVMF:SRNA3) Estimates For 2024

Market forces rained on the parade of Serena Energia S.A. (BVMF:SRNA3) shareholders today, when the analysts downgraded their forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. At R$9.29, shares are up 9.9% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following this downgrade, Serena Energia's twin analysts are forecasting 2024 revenues to be R$3.0b, approximately in line with the last 12 months. After this downgrade, the company is anticipated to report a loss of R$0.25 in 2024, a sharp decline from a profit over the last year. However, before this estimates update, the consensus had been expecting revenues of R$3.7b and R$0.25 per share in losses. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year's revenue estimates, while at the same time holding losses per share steady.

View our latest analysis for Serena Energia

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 0.8% by the end of 2024. This indicates a significant reduction from annual growth of 27% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 1.7% annually for the foreseeable future. The forecasts do look comparatively optimistic for Serena Energia, since they're expecting it to shrink slower than the industry.

The Bottom Line

Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Serena Energia after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2026, 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 downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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