Grupo Financiero Inbursa, S.A.B. de C.V. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

It's been a good week for Grupo Financiero Inbursa, S.A.B. de C.V. (BMV:GFINBURO) shareholders, because the company has just released its latest quarterly results, and the shares gained 7.8% to Mex$37.14. It was a curious result overall, with revenues coming in an incredible 25% below what the analysts had expected, at Mex$6.9b. Statutory earnings per share beat analyst models by 26% to hit Mex$1.00. 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 Grupo Financiero Inbursa. de

Taking into account the latest results, the consensus forecast from Grupo Financiero Inbursa. de's seven analysts is for revenues of Mex$39.6b in 2022, which would reflect a notable 14% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to decline 12% to Mex$3.26 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of Mex$40.5b and earnings per share (EPS) of Mex$3.30 in 2022. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The average price target was steady at Mex$30.49even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. 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. The most optimistic Grupo Financiero Inbursa. de analyst has a price target of Mex$42.00 per share, while the most pessimistic values it at Mex$23.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Grupo Financiero Inbursa. de is forecast to grow faster in the future than it has in the past, with revenues expected to display 30% annualised growth until the end of 2022. If achieved, this would be a much better result than the 2.0% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 11% annually. Not only are Grupo Financiero Inbursa. de's revenues expected to improve, it seems that the analysts are also expecting it 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at Mex$30.49, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Grupo Financiero Inbursa. de going out to 2024, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Grupo Financiero Inbursa. de that you need to be mindful of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.