Analyst Estimates: Here's What Brokers Think Of Vulcabras S.A. (BVMF:VULC3) After Its Second-Quarter Report

Investors in Vulcabras S.A. (BVMF:VULC3) had a good week, as its shares rose 6.1% to close at R$11.47 following the release of its quarterly results. Results overall were respectable, with statutory earnings of R$1.26 per share roughly in line with what the analysts had forecast. Revenues of R$657m came in 3.7% ahead of analyst predictions. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Vulcabras

After the latest results, the two analysts covering Vulcabras are now predicting revenues of R$2.49b in 2022. If met, this would reflect a decent 8.6% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to sink 12% to R$1.31 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$2.38b and earnings per share (EPS) of R$1.22 in 2022. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of R$12.50, suggesting that the forecast performance does not have a long term impact on the company's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Vulcabras' rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 9.9% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Vulcabras to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Vulcabras' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

It might also be worth considering whether Vulcabras' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.