Analysts Just Shipped A Captivating Upgrade To Their SLC Agrícola S.A. (BVMF:SLCE3) Estimates

Celebrations may be in order for SLC Agrícola S.A. (BVMF:SLCE3) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

Following the upgrade, the most recent consensus for SLC Agrícola from its six analysts is for revenues of R$6.9b in 2022 which, if met, would be a huge 76% increase on its sales over the past 12 months. Per-share earnings are expected to jump 36% to R$7.63. Before this latest update, the analysts had been forecasting revenues of R$6.3b and earnings per share (EPS) of R$6.26 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for SLC Agrícola

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of R$52.65, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values SLC Agrícola at R$66.00 per share, while the most bearish prices it at R$31.82. 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.

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 clear from the latest estimates that SLC Agrícola's rate of growth is expected to accelerate meaningfully, with the forecast 57% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 18% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.2% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect SLC Agrícola to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So SLC Agrícola could be a good candidate for more research.

Analysts are clearly in love with SLC Agrícola at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as a weak balance sheet. For more information, you can click through to our platform to learn more about this and the 3 other risks we've identified .

We also provide an overview of the SLC Agrícola 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.