One Veste S.A. Estilo (BVMF:VSTE3) Analyst Just Cut Their EPS Forecasts

The latest analyst coverage could presage a bad day for Veste S.A. Estilo (BVMF:VSTE3), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the current consensus from Veste Estilo's solitary analyst is for revenues of R$1.1b in 2024 which - if met - would reflect an okay 4.0% increase on its sales over the past 12 months. Statutory earnings per share are presumed to jump 328% to R$0.41. Prior to this update, the analyst had been forecasting revenues of R$1.3b and earnings per share (EPS) of R$1.12 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for Veste Estilo

The consensus price target fell 17% to R$20.00, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. The analyst is definitely expecting Veste Estilo's growth to accelerate, with the forecast 5.4% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 10% annually. So it's clear that despite the acceleration in growth, Veste Estilo is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Veste Estilo. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Veste Estilo.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Veste Estilo going out as far as 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.

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