Earnings Miss: Vibra Energia S.A. Missed EPS By 9.6% And Analysts Are Revising Their Forecasts

There's been a notable change in appetite for Vibra Energia S.A. (BVMF:VBBR3) shares in the week since its full-year report, with the stock down 10% to R$12.93. It looks like the results were a bit of a negative overall. While revenues of R$181b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 9.6% to hit R$1.37 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Vibra Energia

Following the recent earnings report, the consensus from twelve analysts covering Vibra Energia is for revenues of R$172.3b in 2023, implying a noticeable 5.0% decline in sales compared to the last 12 months. Per-share earnings are expected to increase 8.6% to R$1.50. In the lead-up to this report, the analysts had been modelling revenues of R$170.5b and earnings per share (EPS) of R$1.94 in 2023. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at R$26.25, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. There are some variant perceptions on Vibra Energia, with the most bullish analyst valuing it at R$35.00 and the most bearish at R$17.50 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 5.0% by the end of 2023. This indicates a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Vibra Energia is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues 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.

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 forecasts for Vibra Energia going out to 2025, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Vibra Energia (including 1 which 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.