Sappi Limited Just Missed Earnings; Here's What Analysts Are Forecasting Now

Sappi Limited (JSE:SAP) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Things were not great overall, with a surprise (statutory) loss of US$0.29 per share on revenues of US$5.4b, even though the analysts had been expecting a profit. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sappi after the latest results.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.JSE:SAP Earnings and Revenue Growth November 9th 2025

After the latest results, the eight analysts covering Sappi are now predicting revenues of US$5.69b in 2026. If met, this would reflect a reasonable 5.1% improvement in revenue compared to the last 12 months. Sappi is also expected to turn profitable, with statutory earnings of US$0.19 per share. Before this earnings report, the analysts had been forecasting revenues of US$5.75b and earnings per share (EPS) of US$0.31 in 2026. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

View our latest analysis for Sappi

It might be a surprise to learn that the consensus price target was broadly unchanged at R39.49, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Sappi analyst has a price target of R75.33 per share, while the most pessimistic values it at R24.20. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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 analysts are definitely expecting Sappi's growth to accelerate, with the forecast 5.1% annualised growth to the end of 2026 ranking favourably alongside historical growth of 1.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.0% per year. So it's clear that despite the acceleration in growth, Sappi is expected to grow meaningfully slower than the industry average.

Story Continues

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sappi. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Sappi's revenue is expected to perform worse than 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.

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 Sappi going out to 2028, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Sappi (1 shouldn't be ignored) you should be aware of.

Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

View Comments