Earnings Beat: TIM S.A. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Investors in TIM S.A. (BVMF:TIMS3) had a good week, as its shares rose 4.9% to close at R$19.87 following the release of its quarterly results. Revenues were R$6.4b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of R$0.33 were also better than expected, beating analyst predictions by 11%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the current consensus from TIM's 15 analysts is for revenues of R$26.7b in 2025. This would reflect a credible 3.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 9.1% to R$1.55. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$26.6b and earnings per share (EPS) of R$1.59 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

Check out our latest analysis for TIM

It might be a surprise to learn that the consensus price target was broadly unchanged at R$20.86, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 TIM at R$23.00 per share, while the most bearish prices it at R$18.50. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting TIM is an easy business to forecast or the the analysts are all using similar assumptions.

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 TIM's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.1% growth on an annualised basis. This is compared to a historical growth rate of 9.8% over the past five years. Compare this to the 101 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.9% per year. Factoring in the forecast slowdown in growth, it looks like TIM is forecast to grow at about the same rate as 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. Happily, there were no real changes to revenue 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple TIM analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - TIM has 1 warning sign we think 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.