The KYB Corporation (TSE:7242) Analyst Just Cut Their Revenue Forecast By 10.0%

The latest analyst coverage could presage a bad day for KYB Corporation (TSE:7242), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

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Following the downgrade, the most recent consensus for KYB from its solo analyst is for revenues of JP¥450b in 2026 which, if met, would be a reasonable 2.7% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 58% to JP¥467. Before this latest update, the analyst had been forecasting revenues of JP¥500b and earnings per share (EPS) of JP¥477 in 2026. Forecasts are clearly less bullish than previously, given the reduced revenue forecasts and the small dip in earnings per share expectations.

Check out our latest analysis for KYB

The analyst made no major changes to their price target of JP¥3,180, suggesting the downgrades are not expected to have a long-term impact on KYB's 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 pretty clear that there is an expectation that KYB's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 2.7% growth on an annualised basis. This is compared to a historical growth rate of 6.3% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.7% annually. Factoring in the forecast slowdown in growth, it looks like KYB is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for KYB. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of KYB going forwards.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2028, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.