Earnings Miss: Huntsman Corporation Missed EPS By 61% And Analysts Are Revising Their Forecasts

Huntsman Corporation (NYSE:HUN) missed earnings with its latest second-quarter results, disappointing overly-optimistic forecasters. Results showed a clear earnings miss, with US$1.6b revenue coming in 5.4% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.11 missed the mark badly, arriving some 61% below what was expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Huntsman

Taking into account the latest results, the current consensus, from the 16 analysts covering Huntsman, is for revenues of US$6.37b in 2023. This implies a noticeable 7.2% reduction in Huntsman's revenue over the past 12 months. Per-share earnings are expected to soar 153% to US$1.14. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$6.88b and earnings per share (EPS) of US$1.57 in 2023. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

The analysts made no major changes to their price target of US$29.38, suggesting the downgrades are not expected to have a long-term impact on Huntsman's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Huntsman at US$34.00 per share, while the most bearish prices it at US$25.00. 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 Huntsman shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 14% by the end of 2023. This indicates a significant reduction from annual growth of 1.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.2% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Huntsman 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 Huntsman. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$29.38, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Huntsman going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - Huntsman has 3 warning signs we think 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.