Satellite Chemical Co.,Ltd. Just Missed EPS By 36%: Here's What Analysts Think Will Happen Next

Satellite Chemical Co.,Ltd. (SZSE:002648) just released its latest quarterly report and things are not looking great. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (CN¥8.8b) coming in 20% below what they had expected. Statutory earnings per share of CN¥0.30 fell 36% short. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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.

Check out our latest analysis for Satellite ChemicalLtd

After the latest results, the 13 analysts covering Satellite ChemicalLtd are now predicting revenues of CN¥47.3b in 2024. If met, this would reflect a solid 16% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 18% to CN¥1.79. Before this earnings report, the analysts had been forecasting revenues of CN¥47.4b and earnings per share (EPS) of CN¥1.80 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of CN¥21.45, suggesting that the company has met expectations in its recent result. 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. The most optimistic Satellite ChemicalLtd analyst has a price target of CN¥25.06 per share, while the most pessimistic values it at CN¥19.32. This is a very narrow spread of estimates, implying either that Satellite ChemicalLtd is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Satellite ChemicalLtd's past performance and to peers in the same industry. We would highlight that Satellite ChemicalLtd's revenue growth is expected to slow, with the forecast 22% annualised growth rate until the end of 2024 being well below the historical 33% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 16% per year. Even after the forecast slowdown in growth, it seems obvious that Satellite ChemicalLtd is also expected to grow faster than 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Satellite ChemicalLtd going out to 2026, 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.