Earnings Beat: Auren Energia S.A. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
Investors in Auren Energia S.A. (BVMF:AURE3) had a good week, as its shares rose 5.5% to close at R$11.80 following the release of its quarterly results. It was overall a positive result, with revenues beating expectations by 6.8% to hit R$3.3b. Auren Energia also reported a statutory profit of R$0.038, which was a nice improvement from the loss that the analysts were predicting. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus, from the ten analysts covering Auren Energia, is for revenues of R$12.7b in 2027. This implies a measurable 4.0% reduction in Auren Energia's revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 63% to R$0.23. Before this latest report, the consensus had been expecting revenues of R$12.5b and R$0.18 per share in losses. While next year's revenue estimates held steady, there was also a considerable increase to loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
See our latest analysis for Auren Energia
As a result, there was no major change to the consensus price target of R$14.72, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Auren Energia analyst has a price target of R$20.90 per share, while the most pessimistic values it at R$11.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for 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 revenue is expected to reverse, with a forecast 3.2% annualised decline to the end of 2027. That is a notable change from historical growth of 31% 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 6.4% annually for the foreseeable future. It's pretty clear that Auren Energia's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Auren Energia. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Auren Energia going out to 2028, and you can see them free on our platform here..
It is also worth noting that we have found 2 warning signs for Auren Energia (1 is significant!) that you need to take into consideration.
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