Arkema S.A. Just Missed Earnings - But Analysts Have Updated Their Models

Shareholders might have noticed that Arkema S.A. (EPA:AKE) filed its full-year result this time last week. The early response was not positive, with shares down 2.2% to €79.40 in the past week. Statutory earnings per share fell badly short of expectations, coming in at €4.49, some 21% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at €9.5b. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Arkema

After the latest results, the 13 analysts covering Arkema are now predicting revenues of €10.0b in 2025. If met, this would reflect a satisfactory 5.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 53% to €6.81. In the lead-up to this report, the analysts had been modelling revenues of €10.0b and earnings per share (EPS) of €7.94 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

The consensus price target held steady at €104, 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. Currently, the most bullish analyst values Arkema at €125 per share, while the most bearish prices it at €82.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Arkema's rate of growth is expected to accelerate meaningfully, with the forecast 5.1% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.0% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 5.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Arkema is expected to grow at about the same rate as 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at €104, 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 Arkema. Long-term earnings power is much more important than next year's profits. We have forecasts for Arkema going out to 2027, 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.

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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.