Revenue Beat: Saudi Aramco Base Oil Company - Luberef Beat Analyst Estimates By 9.0%

Saudi Aramco Base Oil Company - Luberef (TADAWUL:2223) shareholders are probably feeling a little disappointed, since its shares fell 2.8% to ر.س126 in the week after its latest second-quarter results. It was a workmanlike result, with revenues of ر.س2.7b coming in 9.0% ahead of expectations, and statutory earnings per share of ر.س8.98, in line with analyst appraisals. 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.

Check out our latest analysis for Saudi Aramco Base Oil Company - Luberef

Following the recent earnings report, the consensus from five analysts covering Saudi Aramco Base Oil Company - Luberef is for revenues of ر.س9.65b in 2024. This implies a noticeable 3.5% decline in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 6.5% to ر.س7.24. Yet prior to the latest earnings, the analysts had been anticipated revenues of ر.س9.55b and earnings per share (EPS) of ر.س9.26 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at ر.س147, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Aramco Base Oil Company - Luberef at ر.س164 per share, while the most bearish prices it at ر.س135. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Saudi Aramco Base Oil Company - Luberef's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 6.8% annualised decline to the end of 2024. That is a notable change from historical growth of 12% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Saudi Aramco Base Oil Company - Luberef is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Saudi Aramco Base Oil Company - Luberef. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Saudi Aramco Base Oil Company - Luberef going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 2 warning signs for Saudi Aramco Base Oil Company - Luberef that you need to take into consideration.

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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.