M. Dias Branco S.A. Indústria e Comércio de Alimentos (BVMF:MDIA3) Analysts Are Cutting Their Estimates: Here's What You Need To Know

Investors in M. Dias Branco S.A. Indústria e Comércio de Alimentos (BVMF:MDIA3) had a good week, as its shares rose 3.0% to close at R$35.00 following the release of its first-quarter results. Revenues were R$2.1b, with M. Dias Branco Indústria e Comércio de Alimentos reporting some 7.2% below analyst expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for M. Dias Branco Indústria e Comércio de Alimentos

Taking into account the latest results, the six analysts covering M. Dias Branco Indústria e Comércio de Alimentos provided consensus estimates of R$10.2b revenue in 2024, which would reflect a small 2.5% decline over the past 12 months. Per-share earnings are expected to accumulate 7.4% to R$3.11. Before this earnings report, the analysts had been forecasting revenues of R$10.9b and earnings per share (EPS) of R$3.30 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of R$45.50, suggesting the downgrades are not expected to have a long-term impact on M. Dias Branco Indústria e Comércio de Alimentos' valuation. 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 M. Dias Branco Indústria e Comércio de Alimentos analyst has a price target of R$50.00 per share, while the most pessimistic values it at R$41.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting M. Dias Branco Indústria e Comércio de Alimentos is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 3.3% annualised decline to the end of 2024. That is a notable change from historical growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - M. Dias Branco Indústria e Comércio de Alimentos is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for M. Dias Branco Indústria e Comércio de Alimentos. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at R$45.50, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple M. Dias Branco Indústria e Comércio de Alimentos analysts - going out to 2026, and you can see them free on our platform here.

We also provide an overview of the M. Dias Branco Indústria e Comércio de Alimentos Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.