Earnings Update: São Martinho S.A. (BVMF:SMTO3) Just Reported Its Second-Quarter Results And Analysts Are Updating Their Forecasts
Shareholders might have noticed that São Martinho S.A. (BVMF:SMTO3) filed its quarterly result this time last week. The early response was not positive, with shares down 9.7% to R$18.43 in the past week. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 8.4%to hit R$1.9b. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, São Martinho's ten analysts currently expect revenues in 2027 to be R$7.32b, approximately in line with the last 12 months. Statutory per share are forecast to be R$2.10, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of R$7.24b and earnings per share (EPS) of R$1.35 in 2027. 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.
See our latest analysis for São Martinho
There's been no major changes to the consensus price target of R$22.54, 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 São Martinho, with the most bullish analyst valuing it at R$28.00 and the most bearish at R$18.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await São Martinho shareholders.
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. We would highlight that São Martinho's revenue growth is expected to slow, with the forecast 2.2% annualised growth rate until the end of 2027 being well below the historical 6.0% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.0% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than São Martinho.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around São Martinho's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that São Martinho's revenue is expected to 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.
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. At Simply Wall St, we have a full range of analyst estimates for São Martinho going out to 2029, and you can see them free on our platform here..
Plus, you should also learn about the 1 warning sign we've spotted with São Martinho .
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