Falabella S.A. Just Beat EPS By 74%: Here's What Analysts Think Will Happen Next

Falabella S.A. (SNSE:FALABELLA) came out with its second-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like a credible result overall - although revenues of CL$2.9t were what the analysts expected, Falabella surprised by delivering a (statutory) profit of CL$46.00 per share, an impressive 74% above what was forecast. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Falabella

Taking into account the latest results, the consensus forecast from Falabella's nine analysts is for revenues of CL$12t in 2024. This reflects an okay 2.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 58% to CL$150. Before this earnings report, the analysts had been forecasting revenues of CL$12t and earnings per share (EPS) of CL$102 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the massive increase in earnings per share expectations following these results.

There's been no major changes to the consensus price target of CL$2,719, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Falabella, with the most bullish analyst valuing it at CL$3,500 and the most bearish at CL$1,850 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of Falabella'shistorical trends, as the 5.1% annualised revenue growth to the end of 2024 is roughly in line with the 6.1% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.8% per year. So it's pretty clear that Falabella is expected to grow slower than similar companies in the same industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Falabella's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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. At Simply Wall St, we have a full range of analyst estimates for Falabella going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for Falabella you should be aware of.

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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.