Telefônica Brasil S.A. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Telefônica Brasil S.A. (BVMF:VIVT3) shareholders are probably feeling a little disappointed, since its shares fell 9.6% to R$45.53 in the week after its latest quarterly results. Telefônica Brasil beat revenue expectations by 3.7%, at R$14b. Statutory earnings per share (EPS) came in at R$0.54, some 8.7% short of analyst estimates. 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.

See our latest analysis for Telefônica Brasil

Taking into account the latest results, the most recent consensus for Telefônica Brasil from twelve analysts is for revenues of R$54.8b in 2024. If met, it would imply a modest 3.6% increase on its revenue over the past 12 months. Per-share earnings are expected to climb 12% to R$3.46. Before this earnings report, the analysts had been forecasting revenues of R$55.2b and earnings per share (EPS) of R$3.44 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.

The analysts reconfirmed their price target of R$56.92, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Telefônica Brasil, with the most bullish analyst valuing it at R$65.00 and the most bearish at R$43.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Telefônica Brasil's rate of growth is expected to accelerate meaningfully, with the forecast 4.8% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.9% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.2% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Telefônica Brasil is expected to grow slower than the wider industry.

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$56.92, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Telefônica Brasil analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Telefônica Brasil is showing 1 warning sign in our investment analysis , you should know about...

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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.