M. Dias Branco S.A. Indústria e Comércio de Alimentos Just Missed EPS By 34%: Here's What Analysts Think Will Happen Next

Investors in M. Dias Branco S.A. Indústria e Comércio de Alimentos (BVMF:MDIA3) had a good week, as its shares rose 2.2% to close at R$28.45 following the release of its second-quarter results. Revenue of R$2.6b surpassed estimates by 3.0%, although statutory earnings per share missed badly, coming in 34% below expectations at R$0.56 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. 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 M. Dias Branco Indústria e Comércio de Alimentos

Taking into account the latest results, the current consensus, from the five analysts covering M. Dias Branco Indústria e Comércio de Alimentos, is for revenues of R$10.1b in 2024. This implies a noticeable 2.1% reduction in M. Dias Branco Indústria e Comércio de Alimentos' revenue over the past 12 months. Statutory per share are forecast to be R$2.86, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of R$10.3b and earnings per share (EPS) of R$2.97 in 2024. 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.

The consensus price target held steady at R$41.47, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. 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$32.00. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 4.1% annualised decline to the end of 2024. That is a notable change from historical growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.7% per year. It's pretty clear that M. Dias Branco Indústria e Comércio de Alimentos' revenues are expected to perform substantially worse than 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 plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at R$41.47, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for M. Dias Branco Indústria e Comércio de Alimentos going out to 2026, and you can see them free on our platform here..

It might also be worth considering whether M. Dias Branco Indústria e Comércio de Alimentos' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, 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.