EN
Lojas Quero-Quero S.A. (BVMF:LJQQ3) Just Released Its Third-Quarter Earnings: Here's What Analysts Think
Shareholders of Lojas Quero-Quero S.A. (BVMF:LJQQ3) will be pleased this week, given that the stock price is up 11% to R$1.05 following its latest third-quarter results. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Lojas Quero-Quero's two analysts is for revenues of R$3.12b in 2027. This would reflect a credible 6.5% increase on its revenue over the past 12 months. Earnings are expected to improve, with Lojas Quero-Quero forecast to report a statutory profit of R$0.07 per share. In the lead-up to this report, the analysts had been modelling revenues of R$3.12b and earnings per share (EPS) of R$0.58 in 2027. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
See our latest analysis for Lojas Quero-Quero
It might be a surprise to learn that the consensus price target was broadly unchanged at R$3.40, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Lojas Quero-Quero's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 5.2% growth on an annualised basis. This is compared to a historical growth rate of 7.3% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that Lojas Quero-Quero is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Lojas Quero-Quero. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Lojas Quero-Quero'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.
With that in mind, we wouldn't be too quick to come to a conclusion on Lojas Quero-Quero. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2028, which can be seen for free on our platform here.
Before you take the next step you should know about the 2 warning signs for Lojas Quero-Quero (1 is concerning!) that we have uncovered.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.