Earnings Miss: China Petroleum & Chemical Corporation Missed EPS By 31% And Analysts Are Revising Their Forecasts

China Petroleum & Chemical Corporation (HKG:386) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like a pretty bad result, all things considered. Although revenues of CN¥704b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 31% to hit CN¥0.069 per share. 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 China Petroleum & Chemical after the latest results.

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Taking into account the latest results, the current consensus from China Petroleum & Chemical's 13 analysts is for revenues of CN¥3.01t in 2026. This would reflect an okay 6.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 38% to CN¥0.41. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.00t and earnings per share (EPS) of CN¥0.42 in 2026. 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 minor downgrade to their earnings per share forecasts.

View our latest analysis for China Petroleum & Chemical

It might be a surprise to learn that the consensus price target was broadly unchanged at HK$4.67, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. There are some variant perceptions on China Petroleum & Chemical, with the most bullish analyst valuing it at HK$6.39 and the most bearish at HK$3.61 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of China Petroleum & Chemical'shistorical trends, as the 5.2% annualised revenue growth to the end of 2026 is roughly in line with the 5.8% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 1.2% annually. So although China Petroleum & Chemical is expected to maintain its revenue growth rate, it's definitely expected to grow faster 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 China Petroleum & Chemical. Happily, there were no major changes to revenue forecasts, with the business still 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for China Petroleum & Chemical going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with China Petroleum & Chemical , and understanding it should be part of your investment process.

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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.