Telefônica Brasil S.A. Just Missed Earnings - But Analysts Have Updated Their Models

Last week, you might have seen that Telefônica Brasil S.A. (BVMF:VIVT3) released its second-quarter result to the market. The early response was not positive, with shares down 6.2% to R$32.54 in the past week. Revenues were in line with forecasts, at R$16b, although statutory earnings per share came in 14% below what the analysts expected, at R$0.49 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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After the latest results, the 15 analysts covering Telefônica Brasil are now predicting revenues of R$63.6b in 2026. If met, this would reflect a credible 2.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to climb 15% to R$2.38. In the lead-up to this report, the analysts had been modelling revenues of R$63.3b and earnings per share (EPS) of R$2.47 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

See our latest analysis for Telefônica Brasil

It might be a surprise to learn that the consensus price target was broadly unchanged at R$38.88, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Telefônica Brasil, with the most bullish analyst valuing it at R$50.00 and the most bearish at R$31.00 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 Telefônica Brasil shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Telefônica Brasil's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Telefônica Brasil'shistorical trends, as the 5.9% annualised revenue growth to the end of 2026 is roughly in line with the 7.3% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.9% annually. It's clear that while Telefônica Brasil's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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 in mind, we wouldn't be too quick to come to a conclusion on Telefônica Brasil. Long-term earnings power is much more important than next year's profits. We have forecasts for Telefônica Brasil going out to 2028, and you can see them free on our platform here.

We also provide an overview of the Telefônica Brasil Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.