Localiza Rent a Car S.A. (BVMF:RENT3) Just Released Its Yearly Results And Analysts Are Updating Their Estimates

As you might know, Localiza Rent a Car S.A. (BVMF:RENT3) recently reported its full-year numbers. It was an okay result overall, with revenues coming in at R$37b, roughly what the analysts had been expecting. 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.

View our latest analysis for Localiza Rent a Car

Following the latest results, Localiza Rent a Car's twelve analysts are now forecasting revenues of R$44.2b in 2025. This would be a meaningful 19% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 93% to R$3.30. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$44.6b and earnings per share (EPS) of R$3.34 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at R$57.03. 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 Localiza Rent a Car analyst has a price target of R$89.00 per share, while the most pessimistic values it at R$37.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Localiza Rent a Car's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 31% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% 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 obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous 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 forecasts for Localiza Rent a Car going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Localiza Rent a Car .

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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.