Shin-Etsu Chemical Co., Ltd. (TSE:4063) Just Released Its Annual Earnings: Here's What Analysts Think

It's been a pretty great week for Shin-Etsu Chemical Co., Ltd. (TSE:4063) shareholders, with its shares surging 15% to JP¥4,313 in the week since its latest yearly results. It looks like the results were a bit of a negative overall. While revenues of JP¥2.6t were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.9% to hit JP¥270 per share. 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.

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Taking into account the latest results, the consensus forecast from Shin-Etsu Chemical's 17 analysts is for revenues of JP¥2.71t in 2026. This reflects a modest 5.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 12% to JP¥305. In the lead-up to this report, the analysts had been modelling revenues of JP¥2.73t and earnings per share (EPS) of JP¥307 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.

Check out our latest analysis for Shin-Etsu Chemical

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥5,808. 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. There are some variant perceptions on Shin-Etsu Chemical, with the most bullish analyst valuing it at JP¥7,200 and the most bearish at JP¥4,250 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. 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 5.8% 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) 4.7% annually. So it's pretty clear that, while Shin-Etsu Chemical's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at JP¥5,808, 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.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Shin-Etsu Chemical you should be aware 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.