Results: Shin-Etsu Chemical Co., Ltd. Exceeded Expectations And The Consensus Has Updated Its Estimates

Shin-Etsu Chemical Co., Ltd. (TSE:4063) just released its half-year report and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 2.1% to hit JP¥1.3t. Statutory earnings per share (EPS) came in at JP¥70.13, some 7.9% above whatthe analysts had 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Taking into account the latest results, Shin-Etsu Chemical's 17 analysts currently expect revenues in 2026 to be JP¥2.56t, approximately in line with the last 12 months. Statutory per share are forecast to be JP¥268, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥2.56t and earnings per share (EPS) of JP¥270 in 2026. 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.

View our latest analysis for Shin-Etsu Chemical

The analysts reconfirmed their price target of JP¥5,472, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Shin-Etsu Chemical analyst has a price target of JP¥6,100 per share, while the most pessimistic values it at JP¥4,600. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Shin-Etsu Chemical is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.7% by the end of 2026. This indicates a significant reduction from annual growth of 10% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.0% annually for the foreseeable future. It's pretty clear that Shin-Etsu Chemical's revenues are expected to perform substantially worse 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Shin-Etsu Chemical's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥5,472, with the latest estimates not enough to have an impact on their price targets.

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 Shin-Etsu Chemical going out to 2028, and you can see them free on our platform here.

Even so, be aware that Shin-Etsu Chemical is showing 1 warning sign in our investment analysis , you should know about...

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.