Analyst Forecasts Just Became More Bearish On Compañía Cervecerías Unidas S.A. (SNSE:CCU)

The analysts covering Compañía Cervecerías Unidas S.A. (SNSE:CCU) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory 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.

After the downgrade, the consensus from Compañía Cervecerías Unidas' seven analysts is for revenues of CL$2.1t in 2022, which would reflect a chunky 14% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to nosedive 30% to CL$377 in the same period. Before this latest update, the analysts had been forecasting revenues of CL$2.5t and earnings per share (EPS) of CL$416 in 2022. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a small dip in earnings per share numbers as well.

View our latest analysis for Compañía Cervecerías Unidas

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 sales are expected to reverse, with a forecast 14% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 6.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Compañía Cervecerías Unidas is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Compañía Cervecerías Unidas. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Compañía Cervecerías Unidas' revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Compañía Cervecerías Unidas after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Compañía Cervecerías Unidas analysts - going out to 2023, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.