Sembcorp Industries Ltd Recorded A 13% Miss On Revenue: Analysts Are Revisiting Their Models

It's shaping up to be a tough period for Sembcorp Industries Ltd (SGX:U96), which a week ago released some disappointing half-yearly results that could have a notable impact on how the market views the stock. It looks like a weak result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of S$2.9b missed by 13%, and statutory earnings per share of S$0.30 fell short of forecasts by 9.9%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the most recent consensus for Sembcorp Industries from 13 analysts is for revenues of S$6.38b in 2025. If met, it would imply an okay 3.7% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 3.3% to S$0.59. Before this earnings report, the analysts had been forecasting revenues of S$6.83b and earnings per share (EPS) of S$0.64 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

View our latest analysis for Sembcorp Industries

The consensus price target fell 5.2% to S$7.59, with the weaker earnings outlook clearly leading valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Sembcorp Industries, with the most bullish analyst valuing it at S$8.77 and the most bearish at S$6.40 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Sembcorp Industries' growth to accelerate, with the forecast 7.5% annualised growth to the end of 2025 ranking favourably alongside historical growth of 5.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Sembcorp Industries is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Sembcorp Industries' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Sembcorp Industries. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Sembcorp Industries going out to 2027, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Sembcorp Industries (1 is potentially serious) 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.