Yahoo Finance Revenue Beat: Adecoagro S.A. Beat Analyst Estimates By 11%
Investors in Adecoagro S.A. (NYSE:AGRO) had a good week, as its shares rose 2.1% to close at US$8.70 following the release of its first-quarter results. It was a mildly positive result, with revenues exceeding expectations at US$247m, while statutory earnings per share (EPS) of US$0.98 were in line with analyst forecasts. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Adecoagro
Taking into account the latest results, the current consensus, from the six analysts covering Adecoagro, is for revenues of US$1.27b in 2023, which would reflect a chunky 8.2% reduction in Adecoagro's sales over the past 12 months. Statutory earnings per share are predicted to bounce 67% to US$1.03. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.27b and earnings per share (EPS) of US$1.44 in 2023. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.
The consensus price target held steady at US$10.05, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Adecoagro, with the most bullish analyst valuing it at US$13.00 and the most bearish at US$8.10 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 11% by the end of 2023. This indicates a significant reduction from annual growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.0% per year. It's pretty clear that Adecoagro's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Adecoagro going out to 2025, and you can see them free on our platform here.
Before you take the next step you should know about the 4 warning signs for Adecoagro (1 is a bit concerning!) that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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