Earnings Update: Telefônica Brasil S.A. (BVMF:VIVT3) Just Reported Its Yearly Results And Analysts Are Updating Their Forecasts

Investors in Telefônica Brasil S.A. (BVMF:VIVT3) had a good week, as its shares rose 4.0% to close at R$56.18 following the release of its yearly results. Telefônica Brasil reported R$52b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of R$3.03 beat expectations, being 3.7% higher than what the analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Telefônica Brasil

Taking into account the latest results, the most recent consensus for Telefônica Brasil from 13 analysts is for revenues of R$55.0b in 2024. If met, it would imply an okay 5.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 14% to R$3.47. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$54.7b and earnings per share (EPS) of R$3.50 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of R$55.42, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Telefônica Brasil analyst has a price target of R$65.00 per share, while the most pessimistic values it at R$43.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Telefônica Brasil's past performance and to peers in the same industry. The analysts are definitely expecting Telefônica Brasil's growth to accelerate, with the forecast 5.7% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 7.9% annually. So it's clear that despite the acceleration in growth, Telefônica Brasil is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at R$55.42, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Telefônica Brasil. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Telefônica Brasil analysts - going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Telefônica Brasil's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.