Earnings Miss: Here's What Sasol Limited (JSE:SOL) Analysts Are Forecasting For This Year

Sasol Limited (JSE:SOL) just released its latest half-year report and things are not looking great. Results look to have been somewhat negative - revenue fell 8.0% short of analyst estimates at R122b, and statutory earnings of R7.18 per share missed forecasts by 7.6%. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Sasol

Following last week's earnings report, Sasol's eight analysts are forecasting 2025 revenues to be R256.1b, approximately in line with the last 12 months. Sasol is also expected to turn profitable, with statutory earnings of R30.62 per share. Before this earnings report, the analysts had been forecasting revenues of R251.5b and earnings per share (EPS) of R28.24 in 2025. So the consensus seems to have become somewhat more optimistic on Sasol's earnings potential following these results.

There's been no major changes to the consensus price target of R151, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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 Sasol at R210 per share, while the most bearish prices it at R106. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 3.7% annualised decline to the end of 2025. That is a notable change from historical growth of 9.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 10% annually for the foreseeable future. It's pretty clear that Sasol's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Sasol's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at R151, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Sasol. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Sasol analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Sasol that we have uncovered.

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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.