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Market forces rained on the parade of Alvopetro Energy Ltd. (CVE:ALV) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon. The stock price has risen 7.2% to CA$5.97 over the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.
Following the downgrade, the latest consensus from Alvopetro Energy's dual analysts is for revenues of US$55m in 2025, which would reflect a major 22% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 38% to US$0.67. Previously, the analysts had been modelling revenues of US$62m and earnings per share (EPS) of US$0.79 in 2025. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a real cut to earnings per share numbers as well.
View our latest analysis for Alvopetro Energy
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 can infer from the latest estimates that forecasts expect a continuation of Alvopetro Energy'shistorical trends, as the 31% annualised revenue growth to the end of 2025 is roughly in line with the 29% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 2.1% annually. So although Alvopetro Energy is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Alvopetro Energy, and we wouldn't blame shareholders for feeling a little more cautious themselves.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.