WEG S.A. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
There's been a notable change in appetite for WEG S.A. (BVMF:WEGE3) shares in the week since its quarterly report, with the stock down 11% to R$42.73. Revenues of R$11b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at R$0.40, missing estimates by 6.4%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from WEG's 15 analysts is for revenues of R$48.6b in 2027. This reflects a meaningful 19% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 24% to R$1.85. Before this earnings report, the analysts had been forecasting revenues of R$48.7b and earnings per share (EPS) of R$1.87 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
See our latest analysis for WEG
The analysts reconfirmed their price target of R$57.18, 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. Currently, the most bullish analyst values WEG at R$75.00 per share, while the most bearish prices it at R$44.10. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that WEG's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 12% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 14% per year. WEG is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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. We have forecasts for WEG going out to 2028, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with WEG .
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