Localiza Rent a Car S.A. Just Missed Earnings - But Analysts Have Updated Their Models

It's been a good week for Localiza Rent a Car S.A. (BVMF:RENT3) shareholders, because the company has just released its latest third-quarter results, and the shares gained 7.7% to R$44.05. Statutory earnings per share fell badly short of expectations, coming in at R$0.24, some 52% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at R$11b. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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After the latest results, the 13 analysts covering Localiza Rent a Car are now predicting revenues of R$46.0b in 2026. If met, this would reflect a meaningful 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 131% to R$3.88. In the lead-up to this report, the analysts had been modelling revenues of R$46.0b and earnings per share (EPS) of R$3.90 in 2026. 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.

View our latest analysis for Localiza Rent a Car

It will come as no surprise then, to learn that the consensus price target is largely unchanged at R$52.45. 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$66.00 per share, while the most pessimistic values it at R$39.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 10% annualised growth rate until the end of 2026 being well below the historical 32% 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) 7.9% 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. The consensus price target held steady at R$52.45, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Localiza Rent a Car going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Localiza Rent a Car (1 is a bit concerning!) that you need to take into consideration.

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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.