Satellite Chemical Co.,Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Satellite Chemical Co.,Ltd. (SZSE:002648) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Satellite ChemicalLtd reported CN¥46b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CN¥1.80 beat expectations, being 8.4% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Satellite ChemicalLtd after the latest results.

Following the latest results, Satellite ChemicalLtd's ten analysts are now forecasting revenues of CN¥52.9b in 2025. This would be a notable 16% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 17% to CN¥2.11. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥51.3b and earnings per share (EPS) of CN¥2.10 in 2025. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small increase to to revenue forecasts.

Check out our latest analysis for Satellite ChemicalLtd

Even though revenue forecasts increased, there was no change to the consensus price target of CN¥24.84, suggesting the analysts are focused on earnings as the driver of value creation. 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. The most optimistic Satellite ChemicalLtd analyst has a price target of CN¥28.10 per share, while the most pessimistic values it at CN¥21.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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 pretty clear that there is an expectation that Satellite ChemicalLtd's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 16% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past five years. Compare this to the 493 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 16% per year. Factoring in the forecast slowdown in growth, it looks like Satellite ChemicalLtd is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at CN¥24.84, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Satellite ChemicalLtd. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Satellite ChemicalLtd analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Satellite ChemicalLtd has 1 warning sign we think you should be aware 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.