The Arezzo Indústria e Comércio S.A. (BVMF:ARZZ3) First-Quarter Results Are Out And Analysts Have Published New Forecasts

Last week, you might have seen that Arezzo Indústria e Comércio S.A. (BVMF:ARZZ3) released its quarterly result to the market. The early response was not positive, with shares down 9.1% to R$47.82 in the past week. It was an okay report, and revenues came in at R$1.1b, approximately in line with analyst estimates leading up to the results announcement. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Arezzo Indústria e Comércio

Taking into account the latest results, the most recent consensus for Arezzo Indústria e Comércio from twelve analysts is for revenues of R$5.32b in 2024. If met, it would imply a decent 8.8% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 7.2% to R$3.96. Before this earnings report, the analysts had been forecasting revenues of R$5.31b and earnings per share (EPS) of R$3.45 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the substantial gain in earnings per share expectations following these results.

There's been no major changes to the consensus price target of R$77.77, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Arezzo Indústria e Comércio at R$100.00 per share, while the most bearish prices it at R$66.75. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Arezzo Indústria e Comércio's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 29% over the past five years. Compare this to the 15 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 11% per year. So it's pretty clear that, while Arezzo Indústria e Comércio's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Arezzo Indústria e Comércio following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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. We have forecasts for Arezzo Indústria e Comércio going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Arezzo Indústria e Comércio that you need to be mindful of.

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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.