BRF S.A. BRFS stands poised to showcase improved bottom-line performance during the announcement of its second-quarter 2024 earnings on August 14th. Analysts predict quarterly earnings to hit 7 cents per share, a significant rise from the 10-cent loss reported in the same quarter last year.
However, on the flip side, the company’s revenue trajectory might not follow suit, with estimates suggesting a 2.6% dip year over year to $2.6 billion. Nevertheless, a positive trend emerged in the last reported quarter when BRF exceeded earnings expectations by a noteworthy 50%.
Exploring Factors at Play
Over recent times, BRF has reaped rewards from its BRF+ program, focusing on enhancing commercial strategies, operational efficiency, and cost management. By prioritizing value-added and innovative products, the company has fortified its competitive edge and market standing. Additionally, stable feed costs are anticipated to contribute to effective cost management and overall profitability. The cumulative impact of these strategies is expected to underpin the company’s performance in the upcoming quarter.
BRF S.A. Price, Consensus and EPS Trends
While the Brazilian consumer market is on a recovery trajectory, uncertainties related to inflation and employment levels continue to impinge on consumer spending patterns. Historical data also suggests that BRF often faces seasonal fluctuations, typically witnessing subdued performance in the initial half of the year. The persisting influence of these factors might have tempered the company’s performance this quarter.
Insights from the Zacks Model
Despite these considerations, the Zacks model currently remains cautious about a potential earnings beat by BRF. According to the model, a favorable combination of positive Earnings ESP and a Zacks Rank #1, #2, or #3 enhances the likelihood of an earnings exceeding expectations. Unfortunately, BRF carries a Zacks Rank of #3 alongside an Earnings ESP of 0.00%.
Exploring Other Investment Opportunities
While BRF’s outlook remains uncertain, other companies exhibit promising potential for beating earnings estimates in the current quarter. Ollie’s Bargain Outlet and Costco Wholesale Corporation are two such examples. Ollie’s Bargain Outlet, with an Earnings ESP of +2.38% and Costco Wholesale Corporation with an Earnings ESP of +0.67%, both carry a Zacks Rank of 3. These companies are expected to demonstrate growth in both top and bottom-line performance when they report their respective quarterly figures.