Shareholders might have noticed that Satellite Chemical Co.,Ltd. (SZSE:002648) filed its annual result this time last week. The early response was not positive, with shares down 3.4% to CN¥16.68 in the past week. Revenues came in 5.0% below expectations, at CN¥41b. Statutory earnings per share were relatively better off, with a per-share profit of CN¥1.42 being roughly in line with analyst estimates. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Satellite ChemicalLtd's twelve analysts is for revenues of CN¥47.4b in 2024. This would reflect a meaningful 14% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 26% to CN¥1.79. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥52.3b and earnings per share (EPS) of CN¥1.85 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the CN¥20.68 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. The most optimistic Satellite ChemicalLtd analyst has a price target of CN¥25.06 per share, while the most pessimistic values it at CN¥17.30. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Satellite ChemicalLtd's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2024 being well below the historical 34% p.a. growth over the last five years. Compare this to the 484 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 17% per year. So it's pretty clear that, while Satellite ChemicalLtd's revenue growth is expected to slow, it's expected to grow roughly in line with the 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. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 Satellite ChemicalLtd analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Satellite ChemicalLtd has 1 warning sign we think you should be aware 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.