Earnings Beat: Sekisui Chemical Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Investors in Sekisui Chemical Co., Ltd. (TSE:4204) had a good week, as its shares rose 6.8% to close at JP¥2,280 following the release of its half-yearly results. It looks like a credible result overall - although revenues of JP¥629b were in line with what the analysts predicted, Sekisui Chemical surprised by delivering a statutory profit of JP¥103 per share, a notable 10% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Sekisui Chemical

Taking into account the latest results, the most recent consensus for Sekisui Chemical from four analysts is for revenues of JP¥1.31t in 2025. If met, it would imply a reasonable 2.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 2.6% to JP¥188. Before this earnings report, the analysts had been forecasting revenues of JP¥1.31t and earnings per share (EPS) of JP¥189 in 2025. 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 JP¥2,420, 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. Currently, the most bullish analyst values Sekisui Chemical at JP¥2,570 per share, while the most bearish prices it at JP¥2,200. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Sekisui Chemical is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sekisui Chemical's past performance and to peers in the same industry. The analysts are definitely expecting Sekisui Chemical's growth to accelerate, with the forecast 5.5% annualised growth to the end of 2025 ranking favourably alongside historical growth of 3.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 1.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Sekisui Chemical to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. 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. At Simply Wall St, we have a full range of analyst estimates for Sekisui Chemical going out to 2027, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Sekisui Chemical that you need to be mindful 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.