Shin-Etsu Chemical Co., Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Shareholders might have noticed that Shin-Etsu Chemical Co., Ltd. (TSE:4063) filed its quarterly result this time last week. The early response was not positive, with shares down 5.6% to JP¥4,877 in the past week. Shin-Etsu Chemical beat revenue expectations by 2.4%, at JP¥663b. Statutory earnings per share (EPS) came in at JP¥69.93, some 7.7% short of analyst estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 Shin-Etsu Chemical

Following the latest results, Shin-Etsu Chemical's 18 analysts are now forecasting revenues of JP¥2.74t in 2026. This would be a decent 8.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 15% to JP¥317. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥2.74t and earnings per share (EPS) of JP¥321 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of JP¥6,578, 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. Currently, the most bullish analyst values Shin-Etsu Chemical at JP¥7,800 per share, while the most bearish prices it at JP¥5,200. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shin-Etsu Chemical's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Shin-Etsu Chemical's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 6.8% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.0% 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at JP¥6,578, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Shin-Etsu 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 Shin-Etsu 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.