Arkema S.A. (EPA:AKE) Just Reported Third-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Last week saw the newest quarterly earnings release from Arkema S.A. (EPA:AKE), an important milestone in the company's journey to build a stronger business. Revenues came in 2.7% below expectations, at €2.4b. Statutory earnings per share were relatively better off, with a per-share profit of €1.42 being roughly in line with analyst estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Arkema

After the latest results, the 16 analysts covering Arkema are now predicting revenues of €10.0b in 2025. If met, this would reflect a modest 5.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 79% to €8.31. Yet prior to the latest earnings, the analysts had been anticipated revenues of €10.1b and earnings per share (EPS) of €8.51 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at €107, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Arkema at €125 per share, while the most bearish prices it at €89.00. 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 Arkema shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Arkema'shistorical trends, as the 4.6% annualised revenue growth to the end of 2025 is roughly in line with the 4.3% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.9% annually. So although Arkema is expected to maintain its revenue growth rate, it's only growing at about the rate of 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 real changes to revenue forecasts, with the business still expected to grow in line with the overall 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 Arkema. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Arkema analysts - going out to 2026, and you can see them free on our platform here.

You can also see whether Arkema is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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

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.