Saudi Arabian Oil Company (TADAWUL:2222) First-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

Saudi Arabian Oil Company (TADAWUL:2222) just released its quarterly report and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 4.4% to hit ر.س438b. Statutory earnings per share (EPS) came in at ر.س0.43, some 2.3% 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Saudi Arabian Oil

Following the recent earnings report, the consensus from 14 analysts covering Saudi Arabian Oil is for revenues of ر.س1.77t in 2024. This implies a perceptible 3.6% decline in revenue compared to the last 12 months. Per-share earnings are expected to increase 2.5% to ر.س1.86. In the lead-up to this report, the analysts had been modelling revenues of ر.س1.76t and earnings per share (EPS) of ر.س1.86 in 2024. 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at ر.س33.50. 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 Saudi Arabian Oil at ر.س38.00 per share, while the most bearish prices it at ر.س30.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Saudi Arabian Oil is an easy business to forecast or the the analysts are all using similar assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.7% by the end of 2024. This indicates a significant reduction from annual growth of 15% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 1.7% annually for the foreseeable future. So it's pretty clear that Saudi Arabian Oil's revenues are expected to shrink faster than the wider 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 made no changes to their revenue estimates, implying the business is not expected to experience any major impacts to the current trajectory in the near term, even though it is expected to trail the wider industry. The consensus price target held steady at ر.س33.50, 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 Saudi Arabian Oil going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Saudi Arabian Oil , and understanding it should be part of your investment process.

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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.