Analyst Estimates: Here's What Brokers Think Of BRF S.A. (BVMF:BRFS3) After Its First-Quarter Report

BRF S.A. (BVMF:BRFS3) shareholders are probably feeling a little disappointed, since its shares fell 4.7% to R$7.14 in the week after its latest quarterly results. The results don't look great, especially considering that statutory losses grew 133% toR$0.96 per share. Revenues of R$13b did beat expectations by 2.6%, but it looks like a bit of a cold comfort. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for BRF

Taking into account the latest results, the most recent consensus for BRF from eleven analysts is for revenues of R$56.8b in 2023 which, if met, would be a credible 3.4% increase on its sales over the past 12 months. Before this latest report, the consensus had been expecting revenues of R$55.7b and R$0.75 per share in losses. The thing that stands out most is that, while there's been a small lift in revenue estimates, the consensus no longer provides an EPS estimate, suggesting that revenue is more important following the latest results.

We'd also point out that thatthe analysts have made no major changes to their price target of R$11.05. 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. There are some variant perceptions on BRF, with the most bullish analyst valuing it at R$22.00 and the most bearish at R$6.30 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that BRF's revenue growth is expected to slow, with the forecast 4.6% annualised growth rate until the end of 2023 being well below the historical 16% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.1% annually. So it's pretty clear that, while BRF's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts upgraded their revenue estimates for next year. They also upgraded their revenue forecasts, although the latest estimates suggest that BRF will grow in line with the overall industry. The consensus price target held steady at R$11.05, with the latest estimates not enough to have an impact on their price targets.

At least one of BRF's eleven analysts has provided estimates out to 2025, which can be seen for free on our platform here.

It is also worth noting that we have found 1 warning sign for BRF that you need to take into consideration.

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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.