Blau Farmacêutica S.A. Just Missed EPS By 18%: Here's What Analysts Think Will Happen Next

Blau Farmacêutica S.A. (BVMF:BLAU3) shareholders are probably feeling a little disappointed, since its shares fell 7.1% to R$31.50 in the week after its latest full-year results. It was not a great result overall. While revenues of R$1.4b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 18% to hit R$1.89 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Blau Farmacêutica

Taking into account the latest results, the consensus forecast from Blau Farmacêutica's five analysts is for revenues of R$1.63b in 2022, which would reflect a meaningful 20% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 41% to R$2.56. Before this earnings report, the analysts had been forecasting revenues of R$1.65b and earnings per share (EPS) of R$2.38 in 2022. 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$52.50, 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. Currently, the most bullish analyst values Blau Farmacêutica at R$68.00 per share, while the most bearish prices it at R$42.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 20% growth on an annualised basis. That is in line with its 21% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 16% per year. It's clear that while Blau Farmacêutica's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Blau Farmacêutica's earnings potential next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Blau Farmacêutica analysts - going out to 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Blau Farmacêutica you should be aware of.

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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.