Analysts Have Made A Financial Statement On Rumo S.A.'s (BVMF:RAIL3) Second-Quarter Report

As you might know, Rumo S.A. (BVMF:RAIL3) recently reported its second-quarter numbers. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 5.6%to hit R$3.6b. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Rumo

Taking into account the latest results, the current consensus from Rumo's eleven analysts is for revenues of R$13.7b in 2024. This would reflect a decent 9.6% increase on its revenue over the past 12 months. Rumo is also expected to turn profitable, with statutory earnings of R$1.12 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$13.5b and earnings per share (EPS) of R$1.10 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of R$29.50, 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. Currently, the most bullish analyst values Rumo at R$33.00 per share, while the most bearish prices it at R$24.00. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Rumo's past performance and to peers in the same industry. The analysts are definitely expecting Rumo's growth to accelerate, with the forecast 20% annualised growth to the end of 2024 ranking favourably alongside historical growth of 13% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Rumo to grow faster 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Rumo going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Rumo'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.