Analysts Are Updating Their Shin-Etsu Chemical Co., Ltd. (TSE:4063) Estimates After Its Interim Results

Shareholders might have noticed that Shin-Etsu Chemical Co., Ltd. (TSE:4063) filed its half-year result this time last week. The early response was not positive, with shares down 4.2% to JP¥5,623 in the past week. The result was positive overall - although revenues of JP¥1.3t were in line with what the analysts predicted, Shin-Etsu Chemical surprised by delivering a statutory profit of JP¥75.62 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Shin-Etsu Chemical

Taking into account the latest results, the current consensus from Shin-Etsu Chemical's 18 analysts is for revenues of JP¥2.58t in 2025. This would reflect an okay 3.8% increase on its revenue over the past 12 months. Per-share earnings are expected to ascend 13% to JP¥294. In the lead-up to this report, the analysts had been modelling revenues of JP¥2.58t and earnings per share (EPS) of JP¥293 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.

The analysts reconfirmed their price target of JP¥7,167, showing that the business is executing well and in line with expectations. 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 Shin-Etsu Chemical, with the most bullish analyst valuing it at JP¥7,800 and the most bearish at JP¥5,500 per share. 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 Shin-Etsu Chemical shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Shin-Etsu Chemical's revenue growth is expected to slow, with the forecast 7.7% annualised growth rate until the end of 2025 being well below the historical 14% 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) 5.2% per year. So it's pretty clear that, while Shin-Etsu Chemical's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. The consensus price target held steady at JP¥7,167, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Shin-Etsu Chemical analysts - going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Shin-Etsu Chemical that you need to take into consideration.

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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.