Arkema S.A. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Arkema S.A. (EPA:AKE) shareholders are probably feeling a little disappointed, since its shares fell 6.5% to €58.65 in the week after its latest quarterly results. It looks like a pretty bad result, all things considered. Although revenues of €2.4b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 63% to hit €0.62 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, Arkema's 14 analysts currently expect revenues in 2025 to be €9.26b, approximately in line with the last 12 months. Statutory earnings per share are predicted to leap 28% to €3.26. Before this earnings report, the analysts had been forecasting revenues of €9.36b and earnings per share (EPS) of €4.52 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.
View our latest analysis for Arkema
It might be a surprise to learn that the consensus price target was broadly unchanged at €77.63, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Arkema analyst has a price target of €100.00 per share, while the most pessimistic values it at €56.00. 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.
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 3.8% by the end of 2025. This indicates a significant reduction from annual growth of 3.0% 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 - Arkema 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 Arkema. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Arkema's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Arkema analysts - going out to 2027, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 3 warning signs for Arkema (1 can't be ignored!) that you need to be mindful 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.