Raia Drogasil S.A. Just Missed Earnings - But Analysts Have Updated Their Models

It's been a mediocre week for Raia Drogasil S.A. (BVMF:RADL3) shareholders, with the stock dropping 18% to R$16.31 in the week since its latest first-quarter results. It looks like a pretty bad result, all things considered. Although revenues of R$10b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 21% to hit R$0.11 per share. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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After the latest results, the twelve analysts covering Raia Drogasil are now predicting revenues of R$43.9b in 2025. If met, this would reflect a notable 10% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be R$0.69, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$44.1b and earnings per share (EPS) of R$0.71 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

See our latest analysis for Raia Drogasil

It might be a surprise to learn that the consensus price target was broadly unchanged at R$23.37, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Raia Drogasil analyst has a price target of R$32.10 per share, while the most pessimistic values it at R$15.00. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 14% growth on an annualised basis. That is in line with its 16% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 10% annually. So it's pretty clear that Raia Drogasil is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Raia Drogasil. Happily, there were no major changes to revenue forecasts, with the business still 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 Simply Wall St, we have a full range of analyst estimates for Raia Drogasil going out to 2027, and you can see them free on our platform here..

Plus, you should also learn about the 1 warning sign we've spotted with Raia Drogasil .

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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.