Newsflash: Sasol Limited (JSE:SOL) Analysts Have Been Trimming Their Revenue Forecasts

One thing we could say about the analysts on Sasol Limited (JSE:SOL) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the consensus from seven analysts covering Sasol is for revenues of R239b in 2023, implying a definite 13% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of R269b in 2023. The consensus view seems to have become more pessimistic on Sasol, noting the measurable cut to revenue estimates in this update.

See our latest analysis for Sasol

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 highlight that sales are expected to reverse, with a forecast 13% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 6.4% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 0.9% per year. The forecasts do look bearish for Sasol, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. Analysts also expect revenues to shrink faster than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Sasol after today.

Unsatisfied? We have estimates for Sasol from its seven analysts out until 2024, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.