Raia Drogasil S.A. Just Missed Revenue By 5.4%: Here's What Analysts Think Will Happen Next
Raia Drogasil S.A. (BVMF:RADL3) shareholders are probably feeling a little disappointed, since its shares fell 5.2% to R$14.69 in the week after its latest quarterly results. Results look mixed - while revenue fell marginally short of analyst estimates at R$11b, statutory earnings were in line with expectations, at R$0.24 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.
Following the latest results, Raia Drogasil's twelve analysts are now forecasting revenues of R$51.3b in 2027. This would be a meaningful 10% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 47% to R$1.14. In the lead-up to this report, the analysts had been modelling revenues of R$51.3b and earnings per share (EPS) of R$1.14 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.
Check out our latest analysis for Raia Drogasil
It will come as no surprise then, to learn that the consensus price target is largely unchanged at R$25.77. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Raia Drogasil at R$30.00 per share, while the most bearish prices it at R$20.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. It's pretty clear that there is an expectation that Raia Drogasil's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 7.9% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.9% annually. So it's pretty clear that, while Raia Drogasil's revenue growth is expected to slow, it's expected to grow roughly in line with the 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at R$25.77, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Raia Drogasil going out to 2028, and you can see them free on our platform here.
You can also see whether Raia Drogasil is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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