Market forces rained on the parade of Lavoro Limited (NASDAQ:LVRO) shareholders today, when the analysts downgraded their 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. Shares are up 4.1% to US$4.59 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the latest downgrade, the current consensus, from the dual analysts covering Lavoro, is for revenues of R$7.0b in 2025, which would reflect a substantial 22% reduction in Lavoro's sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of R$8.7b in 2025. It looks like forecasts have become a fair bit less optimistic on Lavoro, given the measurable cut to revenue estimates.

See our latest analysis for Lavoro

There was no particular change to the consensus price target of US$5.50, with Lavoro's latest outlook seemingly not enough to result in a change of valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Lavoro's past performance and to peers in the same industry. One more thing stood out to us about these estimates, and it's the idea that Lavoro's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 29% to the end of 2025. This tops off a historical decline of 3.7% a year over the past year. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.3% annually. So while a broad number of companies are forecast to grow, unfortunately Lavoro is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Lavoro going forwards.

Unsatisfied? We have estimates for Lavoro from its dual analysts out until 2026, and you can see them 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 with high insider ownership.

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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.