ر.س6.41: That's What Analysts Think Saudi Kayan Petrochemical Company (TADAWUL:2350) Is Worth After Its Latest Results

It's shaping up to be a tough period for Saudi Kayan Petrochemical Company (TADAWUL:2350), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Revenues missed expectations somewhat, coming in at ر.س2.1b, but statutory earnings fell catastrophically short, with a loss of ر.س0.52 some 72% larger than what the analysts had predicted. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following last week's earnings report, Saudi Kayan Petrochemical's seven analysts are forecasting 2025 revenues to be ر.س8.71b, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 35% to ر.س0.86. Yet prior to the latest earnings, the analysts had been forecasting revenues of ر.س8.92b and losses of ر.س0.97 per share in 2025. Although the revenue estimates have fallen somewhat, Saudi Kayan Petrochemical'sfuture looks a little different to the past, with a cut to the loss per share forecasts in particular.

See our latest analysis for Saudi Kayan Petrochemical

The analysts have cut their price target 8.6% to ر.س6.41per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Saudi Kayan Petrochemical, with the most bullish analyst valuing it at ر.س7.50 and the most bearish at ر.س5.60 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Saudi Kayan Petrochemical is an easy business to forecast or the the analysts are all using similar assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would also point out that the forecast 1.6% annualised revenue decline to the end of 2025 is roughly in line with the historical trend, which saw revenues shrink 1.8% annually 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 grow 2.6% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Saudi Kayan Petrochemical to suffer worse than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Yet - earnings are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Saudi Kayan Petrochemical going out to 2027, and you can see them free on our platform here..

It might also be worth considering whether Saudi Kayan Petrochemical'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.