Lavvi Empreendimentos Imobiliários S.A. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Lavvi Empreendimentos Imobiliários S.A. (BVMF:LAVV3) investors will be delighted, with the company turning in some strong numbers with its latest results. Lavvi Empreendimentos Imobiliários beat earnings, with revenues hitting R$284m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 13%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Lavvi Empreendimentos Imobiliários after the latest results.

See our latest analysis for Lavvi Empreendimentos Imobiliários

Taking into account the latest results, the consensus forecast from Lavvi Empreendimentos Imobiliários' three analysts is for revenues of R$913.0m in 2023. This reflects a substantial 27% improvement in revenue compared to the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$1.02b and earnings per share (EPS) of R$0.90 in 2023. So we can see that while the consensus made a real cut to revenue estimates, it no longer provides an earnings per share estimate. This suggests that the market is now more focused on revenues after the latest results.

Additionally, the consensus price target for Lavvi Empreendimentos Imobiliários rose 6.4% to R$10.04, showing a clear increase in optimism from the the analysts involved. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Lavvi Empreendimentos Imobiliários, with the most bullish analyst valuing it at R$14.20 and the most bearish at R$6.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. The analysts are definitely expecting Lavvi Empreendimentos Imobiliários' growth to accelerate, with the forecast 61% annualised growth to the end of 2023 ranking favourably alongside historical growth of 25% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Lavvi Empreendimentos Imobiliários to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their revenue estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

We have estimates for Lavvi Empreendimentos Imobiliários from its three analysts out to 2025, and you can see them free on our platform here.

Even so, be aware that Lavvi Empreendimentos Imobiliários is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...

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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.