Shin-Etsu Chemical Co., Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Shin-Etsu Chemical Co., Ltd. (TSE:4063) investors will be delighted, with the company turning in some strong numbers with its latest results. Results were good overall, with revenues beating analyst predictions by 3.0% to hit JP¥1.4t. Statutory earnings per share (EPS) came in at JP¥85.32, some 6.7% above whatthe analysts had expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Shin-Etsu Chemical after the latest results.
Following the latest results, Shin-Etsu Chemical's 18 analysts are now forecasting revenues of JP¥2.84t in 2027. This would be a satisfactory 4.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 10% to JP¥306. In the lead-up to this report, the analysts had been modelling revenues of JP¥2.80t and earnings per share (EPS) of JP¥302 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
See our latest analysis for Shin-Etsu Chemical
The analysts reconfirmed their price target of JP¥7,753, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Shin-Etsu Chemical, with the most bullish analyst valuing it at JP¥9,700 and the most bearish at JP¥6,200 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Shin-Etsu Chemical's growth to accelerate, with the forecast 9.4% annualised growth to the end of 2027 ranking favourably alongside historical growth of 4.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Shin-Etsu Chemical is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at JP¥7,753, 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 Shin-Etsu Chemical going out to 2029, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Shin-Etsu Chemical that you need to take into consideration.
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