Ambev S.A. Just Missed EPS By 9.8%: Here's What Analysts Think Will Happen Next

As you might know, Ambev S.A. (BVMF:ABEV3) recently reported its second-quarter numbers. It was a pretty mixed result, with revenues beating expectations to hit R$20b. Statutory earnings fell 9.8% short of analyst forecasts, reaching R$0.15 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.

See our latest analysis for Ambev

After the latest results, the 16 analysts covering Ambev are now predicting revenues of R$86.4b in 2024. If met, this would reflect a satisfactory 7.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 2.3% to R$0.94. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$85.0b and earnings per share (EPS) of R$0.93 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at R$15.48. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Ambev analyst has a price target of R$19.00 per share, while the most pessimistic values it at R$11.40. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ambev's past performance and to peers in the same industry. It's clear from the latest estimates that Ambev's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 11% 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 7.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Ambev is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. 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. We have estimates - from multiple Ambev analysts - going out to 2026, and you can see them free on our platform here.

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

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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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