Results: BB Seguridade Participações S.A. Beat Earnings Expectations And Analysts Now Have New Forecasts

BB Seguridade Participações S.A. (BVMF:BBSE3) last week reported its latest second-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like a credible result overall - although revenues of R$2.5b were in line with what the analysts predicted, BB Seguridade Participações surprised by delivering a statutory profit of R$1.10 per share, a notable 12% above expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on BB Seguridade Participações after the latest results.

Check out our latest analysis for BB Seguridade Participações

Taking into account the latest results, the current consensus from BB Seguridade Participações' ten analysts is for revenues of R$10.1b in 2024. This would reflect a modest 2.6% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to reduce 4.0% to R$4.15 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$10.1b and earnings per share (EPS) of R$4.01 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at R$37.58, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic BB Seguridade Participações analyst has a price target of R$43.00 per share, while the most pessimistic values it at R$30.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. It's pretty clear that there is an expectation that BB Seguridade Participações' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.3% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.1% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than BB Seguridade Participações.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around BB Seguridade Participações' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for BB Seguridade Participações going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for BB Seguridade Participações you should be aware of, and 1 of them makes us a bit uncomfortable.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com