Analysts Are Updating Their Salik Company P.J.S.C. (DFM:SALIK) Estimates After Its First-Quarter Results

It's been a good week for Salik Company P.J.S.C. (DFM:SALIK) shareholders, because the company has just released its latest first-quarter results, and the shares gained 9.8% to د.إ5.73. It was a credible result overall, with revenues of د.إ752m and statutory earnings per share of د.إ0.15 both in line with analyst estimates, showing that Salik Company P.J.S.C is executing in line with expectations. 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.

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Following the latest results, Salik Company P.J.S.C's ten analysts are now forecasting revenues of د.إ2.99b in 2025. This would be a sizeable 21% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 22% to د.إ0.20. Before this earnings report, the analysts had been forecasting revenues of د.إ2.98b and earnings per share (EPS) of د.إ0.21 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

View our latest analysis for Salik Company P.J.S.C

The consensus price target held steady at د.إ5.72, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Salik Company P.J.S.C at د.إ6.80 per share, while the most bearish prices it at د.إ4.70. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Salik Company P.J.S.C shareholders.

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. It's clear from the latest estimates that Salik Company P.J.S.C's rate of growth is expected to accelerate meaningfully, with the forecast 29% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 9.6% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Salik Company P.J.S.C to grow faster 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Salik Company P.J.S.C. Long-term earnings power is much more important than next year's profits. We have forecasts for Salik Company P.J.S.C going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Salik Company P.J.S.C that you need to be mindful of.

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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.