Stepan Company (NYSE:SCL) defied analyst predictions to release its second-quarter results, which were ahead of market expectations. The company beat forecasts, with revenue of US$684m, some 7.6% above estimates, and statutory earnings per share (EPS) coming in at US$1.00, 133% ahead of expectations. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Following the latest results, Stepan's dual analysts are now forecasting revenues of US$2.53b in 2026. This would be an okay 4.1% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 37% (on a statutory basis) to US$0.16. In the lead-up to this report, the analysts had been modelling revenues of US$2.51b and earnings per share (EPS) of US$0.02 in 2026. While the analysts have made no real change to their revenue estimates, we can see that the consensus is now modelling a loss next year - a clear dip in sentiment compared to the previous outlook of a profit.

Although the analysts are now forecasting higher losses, the average price target rose 13% to 75, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business.

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. One thing stands out from these estimates, which is that Stepan is forecast to grow faster in the future than it has in the past, with revenues expected to display 8.3% annualised growth until the end of 2026. If achieved, this would be a much better result than the 1.5% annual decline 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 4.8% annually. So it looks like Stepan is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest low-light for us was that the forecasts for Stepan dropped from profits to a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Stepan. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2028, which can be seen for free on our platform here.

You still need to take note of risks, for example - Stepan has 2 warning signs (and 1 which is potentially serious) we think you should know about.

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.