Earnings Update: Caixa Seguridade Participações S.A. (BVMF:CXSE3) Just Reported Its Third-Quarter Results And Analysts Are Updating Their Forecasts
Investors in Caixa Seguridade Participações S.A. (BVMF:CXSE3) had a good week, as its shares rose 3.0% to close at R$21.58 following the release of its third-quarter results. Caixa Seguridade Participações reported in line with analyst predictions, delivering revenues of R$1.5b and statutory earnings per share of R$0.39, suggesting the business is executing well and in line with its plan. 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. 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 the 13 analysts covering Caixa Seguridade Participações, is for revenues of R$6.82b in 2027. This implies a not inconsiderable 20% reduction in Caixa Seguridade Participações' revenue over the past 12 months. Statutory earnings per share are forecast to nosedive 27% to R$1.70 in the same period. In the lead-up to this report, the analysts had been modelling revenues of R$6.83b and earnings per share (EPS) of R$1.69 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 Caixa Seguridade Participações
It will come as no surprise then, to learn that the consensus price target is largely unchanged at R$21.39. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Caixa Seguridade Participações analyst has a price target of R$25.00 per share, while the most pessimistic values it at R$16.00. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 16% by the end of 2027. This indicates a significant reduction from annual growth of 21% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 1.6% annually for the foreseeable future. The forecasts do look bearish for Caixa Seguridade Participações, since they're expecting it to shrink faster than 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. The consensus also reconfirmed their revenue estimates, suggesting that it is performing in line with expectations. Plus, our data suggests that Caixa Seguridade Participações 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.
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. At Simply Wall St, we have a full range of analyst estimates for Caixa Seguridade Participações going out to 2028, and you can see them free on our platform here..
It is also worth noting that we have found 2 warning signs for Caixa Seguridade Participações (1 makes us a bit uncomfortable!) that you need to take into consideration.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.