Results: Yanbu National Petrochemical Company Exceeded Expectations And The Consensus Has Updated Its Estimates

A week ago, Yanbu National Petrochemical Company (TADAWUL:2290) came out with a strong set of second-quarter numbers that could potentially lead to a re-rate of the stock. Yanbu National Petrochemical delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting ر.س1.7b-11% above indicated-andر.س0.40-169% above forecasts- respectively 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Yanbu National Petrochemical

Taking into account the latest results, the most recent consensus for Yanbu National Petrochemical from ten analysts is for revenues of ر.س6.32b in 2024. If met, it would imply a meaningful 13% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 150% to ر.س0.81. In the lead-up to this report, the analysts had been modelling revenues of ر.س6.30b and earnings per share (EPS) of ر.س0.80 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.س39.17. 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. The most optimistic Yanbu National Petrochemical analyst has a price target of ر.س45.00 per share, while the most pessimistic values it at ر.س32.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Yanbu National Petrochemical shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Yanbu National Petrochemical's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Yanbu National Petrochemical is forecast to grow faster in the future than it has in the past, with revenues expected to display 28% annualised growth until the end of 2024. If achieved, this would be a much better result than the 2.0% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 5.6% per year. Not only are Yanbu National Petrochemical's revenues expected to improve, it seems that the analysts are also expecting it to grow 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at ر.س39.17, 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 estimates - from multiple Yanbu National Petrochemical analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Yanbu National Petrochemical that 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com