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BB Seguridade Participações S.A. Just Beat Revenue Estimates By 12%
A week ago, BB Seguridade Participações S.A. (BVMF:BBSE3) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. It was a positive result, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 12% higher than the analysts had forecast, at R$2.6b, while EPS of R$1.20 beat analyst models by 4.9%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the consensus from BB Seguridade Participações' eleven analysts is for revenues of R$9.52b in 2027, which would reflect an uneasy 8.6% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to shrink 7.6% to R$4.37 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$9.52b and earnings per share (EPS) of R$4.37 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
View our latest analysis for BB Seguridade Participações
The analysts reconfirmed their price target of R$38.25, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic BB Seguridade Participações analyst has a price target of R$46.00 per share, while the most pessimistic values it at R$31.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the BB Seguridade Participações' past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 6.9% by the end of 2027. This indicates a significant reduction from annual growth of 14% 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 3.4% annually for the foreseeable future. It's pretty clear that BB Seguridade Participações' revenues are expected to perform substantially worse 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at R$38.25, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on BB Seguridade Participações. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple BB Seguridade Participações analysts - going out to 2028, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for BB Seguridade Participações (1 makes us a bit uncomfortable!) that you should be aware of.
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