Sociedad Química y Minera de Chile S.A. (NYSE:SQM) came out with its second-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results overall were not great, with earnings of US$0.75 per share falling drastically short of analyst expectations. Meanwhile revenues hit US$1.3b and were slightly better than forecasts. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the consensus from Sociedad Química y Minera de Chile's 17 analysts is for revenues of US$4.76b in 2024, which would reflect an uneasy 14% decline in revenue compared to the last year of performance. Statutory earnings per share are predicted to leap 1,253% to US$1.26. In the lead-up to this report, the analysts had been modelling revenues of US$5.07b and earnings per share (EPS) of US$4.55 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.
The analysts made no major changes to their price target of US$58.31, suggesting the downgrades are not expected to have a long-term impact on Sociedad Química y Minera de Chile'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. There are some variant perceptions on Sociedad Química y Minera de Chile, with the most bullish analyst valuing it at US$85.00 and the most bearish at US$35.00 per share. 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 26% annualised decline to the end of 2024. That is a notable change from historical growth of 35% 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 4.8% annually for the foreseeable future. It's pretty clear that Sociedad Química y Minera de Chile's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$58.31, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Sociedad Química y Minera de Chile going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Sociedad Química y Minera de Chile has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.
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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.