China Petroleum & Chemical Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Investors in China Petroleum & Chemical Corporation (HKG:386) had a good week, as its shares rose 9.1% to close at HK$4.87 following the release of its third-quarter results. Revenues were CN¥770b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at CN¥0.11, an impressive 61% ahead of estimates. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, China Petroleum & Chemical's eleven analysts currently expect revenues in 2027 to be CN¥2.84t, approximately in line with the last 12 months. Statutory earnings per share are predicted to bounce 26% to CN¥0.42. In the lead-up to this report, the analysts had been modelling revenues of CN¥2.84t and earnings per share (EPS) of CN¥0.42 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 China Petroleum & Chemical
The analysts reconfirmed their price target of HK$5.21, showing that the business is executing well and in line with expectations. 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. Currently, the most bullish analyst values China Petroleum & Chemical at HK$7.10 per share, while the most bearish prices it at HK$4.20. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the China Petroleum & Chemical's past performance and to peers in the same industry. We would also point out that the forecast 1.1% annualised revenue decline to the end of 2027 is roughly in line with the historical trend, which saw revenues shrink 1.1% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 0.5% annually. So while a broad number of companies are forecast to grow, unfortunately China Petroleum & Chemical is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that China Petroleum & Chemical's revenue is expected to perform worse than the wider industry. The consensus price target held steady at HK$5.21, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on China Petroleum & Chemical. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for China Petroleum & Chemical going out to 2028, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for China Petroleum & Chemical that we have uncovered.
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