Syensqo SA/NV Just Missed Earnings - But Analysts Have Updated Their Models

It's been a mediocre week for Syensqo SA/NV (EBR:SYENS) shareholders, with the stock dropping 10% to €71.79 in the week since its latest half-year results. Revenue of €3.5b surpassed estimates by 3.8%, although statutory earnings per share missed badly, coming in 85% below expectations at €0.27 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Syensqo after the latest results.

See our latest analysis for Syensqo

Taking into account the latest results, Syensqo's 17 analysts currently expect revenues in 2024 to be €6.70b, approximately in line with the last 12 months. Statutory earnings per share are predicted to shoot up 2,257% to €4.93. In the lead-up to this report, the analysts had been modelling revenues of €6.78b and earnings per share (EPS) of €5.55 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

The consensus price target held steady at €106, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on Syensqo, with the most bullish analyst valuing it at €122 and the most bearish at €78.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Syensqo's past performance and to peers in the same industry. We would also point out that the forecast 2.2% annualised revenue decline to the end of 2024 is better than the historical trend, which saw revenues shrink 15% annually over the past year Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to decline 5.0% annually. While Syensqo's negative revenue trend is expected to moderate, revenues are still expected to shrink next year albeit at a slower rate than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Syensqo. On the plus side, they made no changes to their revenue estimates - and they expect it to perform better than the wider industry. The consensus price target held steady at €106, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Syensqo going out to 2026, and you can see them free on our platform here..

Even so, be aware that Syensqo is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com