Need To Know: Analysts Are Much More Bullish On Colbún S.A. (SNSE:COLBUN) Revenues

Colbún S.A. (SNSE:COLBUN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that Colbún will make substantially more sales than they'd previously expected.

After the upgrade, the consensus from Colbún's four analysts is for revenues of US$2.1b in 2023, which would reflect a discernible 2.2% decline in sales compared to the last year of performance. Before the latest update, the analysts were foreseeing US$1.7b of revenue in 2023. The consensus has definitely become more optimistic, showing a very substantial lift in revenue forecasts.

View our latest analysis for Colbún

The consensus price target rose 8.8% to US$0.15, with the analysts clearly more optimistic about Colbún's prospects following this update. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Colbún, with the most bullish analyst valuing it at US$128 and the most bearish at US$102 per share. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. We would highlight that sales are expected to reverse, with a forecast 3.0% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 3.7% 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 1.4% annually for the foreseeable future. So it's pretty clear that Colbún's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Colbún this year. The analysts also expect revenues to shrink faster than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Colbún.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential risks with Colbún, including a weak balance sheet. You can learn more, and discover the 3 other risks we've identified, for free on our platform here.

You can also see our analysis of Colbún's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.