Stock Analysis

National Industrialization Company Just Beat Revenue By 9.8%: Here's What Analysts Think Will Happen Next

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National Industrialization Company (TADAWUL:2060) shareholders are probably feeling a little disappointed, since its shares fell 4.3% to ر.س16.20 in the week after its latest quarterly results. It was a workmanlike result, with revenues of ر.س1.1b coming in 9.8% ahead of expectations, and statutory earnings per share of ر.س2.03, in line with analyst appraisals. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on National Industrialization after the latest results.

View our latest analysis for National Industrialization

SASE:2060 Earnings and Revenue Growth August 8th 2022

After the latest results, the consensus from National Industrialization's four analysts is for revenues of ر.س3.52b in 2022, which would reflect an uncomfortable 17% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to shrink 8.4% to ر.س1.75 in the same period. Before this earnings report, the analysts had been forecasting revenues of ر.س3.26b and earnings per share (EPS) of ر.س1.43 in 2022. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a very substantial lift in earnings per share in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of ر.س20.22, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 National Industrialization, with the most bullish analyst valuing it at ر.س25.00 and the most bearish at ر.س14.50 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing that stands out from these estimates is that revenues are expected to keep falling until the end of 2022, roughly in line with the historical decline of 28% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to decline 5.9% annually. While this is interesting, National Industrialization's, revenues are still expected to shrink next year, and at a faster rate than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards National Industrialization following these results. Fortunately, they also upgraded their revenue estimates, although National Industrialization'srevenues are still expected to trail the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for National Industrialization going out to 2024, and you can see them free on our platform here.

It might also be worth considering whether National Industrialization's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.