Atacadão S.A. Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts

Investors in Atacadão S.A. (BVMF:CRFB3) had a good week, as its shares rose 8.7% to close at R$12.54 following the release of its annual results. Revenues came in at R$110b, in line with estimates, while Atacadão reported a statutory loss of R$0.38 per share, well short of prior analyst forecasts for a profit. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Atacadão

Taking into account the latest results, the most recent consensus for Atacadão from twelve analysts is for revenues of R$120.2b in 2024. If met, it would imply a decent 9.4% increase on its revenue over the past 12 months. Earnings are expected to improve, with Atacadão forecast to report a statutory profit of R$0.72 per share. Before this earnings report, the analysts had been forecasting revenues of R$119.0b and earnings per share (EPS) of R$0.70 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at R$14.16, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Atacadão at R$19.00 per share, while the most bearish prices it at R$10.30. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Atacadão's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Atacadão's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 9.4% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Atacadão.

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 Atacadão following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Atacadão. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Atacadão analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Atacadão that you should be aware 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.