Stock Analysis

Revenue Downgrade: Here's What Analysts Forecast For Empresas Copec S.A. (SNSE:COPEC)

Source: Shutterstock

The latest analyst coverage could presage a bad day for Empresas Copec S.A. (SNSE:COPEC), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After this downgrade, Empresas Copec's eight analysts are now forecasting revenues of US$22b in 2021. This would be a substantial 24% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$27b of revenue in 2021. It looks like forecasts have become a fair bit less optimistic on Empresas Copec, given the substantial drop in revenue estimates.

View our latest analysis for Empresas Copec

SNSE:COPEC Earnings and Revenue Growth March 19th 2021

There was no particular change to the consensus price target of US$11.15, with Empresas Copec's latest outlook seemingly not enough to result in a change of 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. Currently, the most bullish analyst values Empresas Copec at US$10,010 per share, while the most bearish prices it at US$5,521. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how think this business will perform. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

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. It's clear from the latest estimates that Empresas Copec's rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 5.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Empresas Copec is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also forecasting more rapid revenue growth than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Empresas Copec going forwards.

Unsatisfied? At least one of Empresas Copec's eight analysts has provided estimates out to 2024, 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.

If you’re looking to trade Empresas Copec, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

Valuation is complex, but we're helping make it simple.

Find out whether Empresas Copec is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

This article by Simply Wall St is general in nature. 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.
*Interactive Brokers Rated Lowest Cost Broker by Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at)