Sendas Distribuidora S.A. Just Recorded A 21% EPS Beat: Here's What Analysts Are Forecasting Next

Investors in Sendas Distribuidora S.A. (BVMF:ASAI3) had a good week, as its shares rose 2.2% to close at R$13.54 following the release of its yearly results. It looks like a credible result overall - although revenues of R$42b were what the analysts expected, Sendas Distribuidora surprised by delivering a (statutory) profit of R$1.19 per share, an impressive 21% above what was forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Sendas Distribuidora

Taking into account the latest results, the consensus forecast from Sendas Distribuidora's twelve analysts is for revenues of R$55.2b in 2022, which would reflect a major 32% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to tumble 46% to R$0.65 in the same period. In the lead-up to this report, the analysts had been modelling revenues of R$55.5b and earnings per share (EPS) of R$0.79 in 2022. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at R$20.15, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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. The most optimistic Sendas Distribuidora analyst has a price target of R$23.00 per share, while the most pessimistic values it at R$17.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 clear from the latest estimates that Sendas Distribuidora's rate of growth is expected to accelerate meaningfully, with the forecast 32% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 17% 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 Sendas Distribuidora to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sendas Distribuidora. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at R$20.15, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Sendas Distribuidora going out to 2024, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with Sendas Distribuidora .

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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.