Analysts Are Updating Their SLC Agrícola S.A. (BVMF:SLCE3) Estimates After Its Second-Quarter Results

Last week, you might have seen that SLC Agrícola S.A. (BVMF:SLCE3) released its quarterly result to the market. The early response was not positive, with shares down 3.6% to R$17.70 in the past week. It was a weak result overall, with SLC Agrícola reporting R$1.4b in revenues, which was 25% less than what the analysts had expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for SLC Agrícola

Taking into account the latest results, the consensus forecast from SLC Agrícola's six analysts is for revenues of R$7.34b in 2024. This reflects a modest 6.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 20% to R$1.54. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$7.31b and earnings per share (EPS) of R$1.92 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

The consensus price target held steady at R$23.42, 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. Currently, the most bullish analyst values SLC Agrícola at R$27.00 per share, while the most bearish prices it at R$19.60. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that SLC Agrícola's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 25% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.0% annually. Even after the forecast slowdown in growth, it seems obvious that SLC Agrícola is also expected to grow faster 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 SLC Agrícola. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at R$23.42, 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 forecasts for SLC Agrícola going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with SLC Agrícola , and understanding these should be part of your investment process.

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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.