Alfa S.A.B. de C.V. (BMV:ALFAA) Just Released Its Yearly Earnings: Here's What Analysts Think

The full-year results for Alfa S.A.B. de C.V. (BMV:ALFAA) were released last week, making it a good time to revisit its performance. It was an okay result overall, with revenues coming in at Mex$291b, 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.

Check out our latest analysis for Alfa. de

Taking into account the latest results, Alfa. de's four analysts currently expect revenues in 2024 to be Mex$287.8b, approximately in line with the last 12 months. Alfa. de is also expected to turn profitable, with statutory earnings of Mex$2.18 per share. Before this earnings report, the analysts had been forecasting revenues of Mex$297.4b and earnings per share (EPS) of Mex$1.86 in 2024. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the solid gain to to the earnings per share numbers.

The consensus has made no major changes to the price target of Mex$16.09, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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 Alfa. de, with the most bullish analyst valuing it at Mex$22.00 and the most bearish at Mex$12.40 per share. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Alfa. de's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.2% by the end of 2024. This indicates a significant reduction from annual growth of 3.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.9% annually for the foreseeable future. It's pretty clear that Alfa. de's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Alfa. de's earnings potential next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at Mex$16.09, 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 estimates - from multiple Alfa. de analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Alfa. de that 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.