Saudi Arabian Oil Company (TADAWUL:2222) defied analyst predictions to release its second-quarter results, which were ahead of market expectations. It was a positive result, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 15% higher than the analysts had forecast, at ر.س522b, while EPS of ر.س0.50 beat analyst models by 7.4%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Following last week's earnings report, Saudi Arabian Oil's eleven analysts are forecasting 2026 revenues to be ر.س1.84t, approximately in line with the last 12 months. Statutory earnings per share are predicted to step up 14% to ر.س1.92. Before this earnings report, the analysts had been forecasting revenues of ر.س1.92t and earnings per share (EPS) of ر.س1.96 in 2026. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The consensus has reconfirmed its price target of ر.س30.12, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Saudi Arabian Oil's market value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Saudi Arabian Oil analyst has a price target of ر.س35.00 per share, while the most pessimistic values it at ر.س26.80. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2026 brings more of the same, according to the analysts, with revenue forecast to display 1.4% growth on an annualised basis. That is in line with its 1.3% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues fall 0.1% per year. So it's clear that not only is revenue growth expected to be maintained, but Saudi Arabian Oil is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Saudi Arabian Oil going out to 2028, and you can see them free on our platform here..

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.