São Martinho S.A. (BVMF:SMTO3) Just Reported Second-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Investors in São Martinho S.A. (BVMF:SMTO3) had a good week, as its shares rose 2.1% to close at R$13.54 following the release of its quarterly results. The result was fairly weak overall, with revenues of R$1.7b being 5.2% less than what the analysts had been modelling. 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.

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Taking into account the latest results, the current consensus from São Martinho's nine analysts is for revenues of R$7.33b in 2026. This would reflect a reasonable 2.4% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 28% to R$1.96. Before this earnings report, the analysts had been forecasting revenues of R$7.80b and earnings per share (EPS) of R$2.00 in 2026. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

See our latest analysis for São Martinho

The consensus has reconfirmed its price target of R$26.19, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on São Martinho's market value. 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 São Martinho analyst has a price target of R$39.00 per share, while the most pessimistic values it at R$13.90. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that São Martinho's revenue growth is expected to slow, with the forecast 4.9% annualised growth rate until the end of 2026 being well below the historical 11% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that São Martinho is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at R$26.19, 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 São Martinho going out to 2028, 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 São Martinho (at least 1 which is significant) , and understanding them 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.