Localiza Rent a Car S.A. (BVMF:RENT3) Just Released Its Third-Quarter Earnings: Here's What Analysts Think

It's been a good week for Localiza Rent a Car S.A. (BVMF:RENT3) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.9% to R$45.18. It was an okay report, and revenues came in at R$9.7b, approximately in line with analyst estimates leading up to the results announcement. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Localiza Rent a Car

Taking into account the latest results, the current consensus from Localiza Rent a Car's twelve analysts is for revenues of R$45.0b in 2025. This would reflect a major 28% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 118% to R$3.46. In the lead-up to this report, the analysts had been modelling revenues of R$45.3b and earnings per share (EPS) of R$3.50 in 2025. 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$64.03, 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 Localiza Rent a Car, with the most bullish analyst valuing it at R$89.00 and the most bearish at R$52.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Localiza Rent a Car's revenue growth is expected to slow, with the forecast 21% annualised growth rate until the end of 2025 being well below the historical 30% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% per year. So it's pretty clear that, while Localiza Rent a Car's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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

You still need to take note of risks, for example - Localiza Rent a Car has 3 warning signs (and 2 which are a bit unpleasant) we think 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.