Analyst Estimates: Here's What Brokers Think Of Rede D'Or São Luiz S.A. (BVMF:RDOR3) After Its Second-Quarter Report

Shareholders of Rede D'Or São Luiz S.A. (BVMF:RDOR3) will be pleased this week, given that the stock price is up 12% to R$36.27 following its latest quarterly results. It was a credible result overall, with revenues of R$14b and statutory earnings per share of R$0.45 both in line with analyst estimates, showing that Rede D'Or São Luiz is executing in line with expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the most recent consensus for Rede D'Or São Luiz from eleven analysts is for revenues of R$56.6b in 2025. If met, it would imply a satisfactory 7.3% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 4.8% to R$1.95. In the lead-up to this report, the analysts had been modelling revenues of R$56.4b and earnings per share (EPS) of R$1.88 in 2025. So the consensus seems to have become somewhat more optimistic on Rede D'Or São Luiz's earnings potential following these results.

View our latest analysis for Rede D'Or São Luiz

The consensus price target was unchanged at R$39.93, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Rede D'Or São Luiz at R$45.00 per share, while the most bearish prices it at R$34.38. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 Rede D'Or São Luiz's revenue growth is expected to slow, with the forecast 15% annualised growth rate until the end of 2025 being well below the historical 31% 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 9.2% annually. Even after the forecast slowdown in growth, it seems obvious that Rede D'Or São Luiz is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Rede D'Or São Luiz's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Rede D'Or São Luiz. Long-term earnings power is much more important than next year's profits. We have forecasts for Rede D'Or São Luiz going out to 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our 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.