Minerva S.A. Just Missed EPS By 35%: Here's What Analysts Think Will Happen Next

It's been a pretty great week for Minerva S.A. (BVMF:BEEF3) shareholders, with its shares surging 16% to R$7.51 in the week since its latest quarterly results. Statutory earnings per share fell badly short of expectations, coming in at R$0.15, some 35% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at R$7.7b. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Minerva

After the latest results, the nine analysts covering Minerva are now predicting revenues of R$30.6b in 2024. If met, this would reflect a decent 8.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 345% to R$0.54. In the lead-up to this report, the analysts had been modelling revenues of R$30.2b and earnings per share (EPS) of R$0.55 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at R$8.88, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Minerva analyst has a price target of R$13.10 per share, while the most pessimistic values it at R$7.00. 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.

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 Minerva's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Minerva is expected to grow much 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 Minerva. 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.

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

Even so, be aware that Minerva is showing 4 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

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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.