Revenue Downgrade: Here's What Analysts Forecast For Saudi Basic Industries Corporation (TADAWUL:2010)
The analysts covering Saudi Basic Industries Corporation (TADAWUL:2010) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the latest downgrade, Saudi Basic Industries' nine analysts currently expect revenues in 2026 to be ر.س108b, approximately in line with the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting ر.س1.92 in per-share earnings. Prior to this update, the analysts had been forecasting revenues of ر.س121b and earnings per share (EPS) of ر.س2.24 in 2026. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a considerable drop in earnings per share numbers as well.
Check out our latest analysis for Saudi Basic Industries
Analysts made no major changes to their price target of ر.س59.46, suggesting the downgrades are not expected to have a long-term impact on Saudi Basic Industries' valuation.
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. It's also worth noting that the years of declining sales look to have come to an end, with the forecast for flat revenues to the end of 2026. Historically, Saudi Basic Industries' sales have shrunk approximately 11% annually over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.8% annually. Although Saudi Basic Industries' revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Saudi Basic Industries' revenues are expected to grow slower 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 Saudi Basic Industries after today.
After a downgrade like this one, it's pretty clear that previous forecasts were too optimistic. Worse, it's possible that the forecast future income could struggle to cover Saudi Basic Industries'dividend payments. For more information, you can click here to learn more about our dividend analysis and the 1 potential concern we've identified.
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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.