Irani Papel e Embalagem S.A. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Investors in Irani Papel e Embalagem S.A. (BVMF:RANI3) had a good week, as its shares rose 3.9% to close at R$7.55 following the release of its quarterly results. Revenues were R$414m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at R$0.48, an impressive 88% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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, Irani Papel e Embalagem's three analysts currently expect revenues in 2025 to be R$1.72b, approximately in line with the last 12 months. Statutory earnings per share are expected to crater 42% to R$0.99 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$1.73b and earnings per share (EPS) of R$0.95 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

See our latest analysis for Irani Papel e Embalagem

The consensus price target was unchanged at R$9.89, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Irani Papel e Embalagem analyst has a price target of R$10.75 per share, while the most pessimistic values it at R$8.80. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Irani Papel e Embalagem's revenue growth is expected to slow, with the forecast 1.6% annualised growth rate until the end of 2025 being well below the historical 8.1% 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 7.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that Irani Papel e Embalagem is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Irani Papel e Embalagem following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Irani Papel e Embalagem's revenue is expected to perform worse than the wider industry. The consensus price target held steady at R$9.89, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Irani Papel e Embalagem analysts - going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Irani Papel e Embalagem you should be aware of, and 2 of them don't sit too well with us.

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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.