Revenue Beat: Pacific Industrial Co., Ltd. Exceeded Revenue Forecasts By 5.1% And Analysts Are Updating Their Estimates

The first-quarter results for Pacific Industrial Co., Ltd. (TSE:7250) were released last week, making it a good time to revisit its performance. Results overall were respectable, with statutory earnings of JP¥289 per share roughly in line with what the analysts had forecast. Revenues of JP¥52b came in 5.1% ahead of analyst predictions. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Pacific Industrial

Taking into account the latest results, the five analysts covering Pacific Industrial provided consensus estimates of JP¥202.3b revenue in 2025, which would reflect a perceptible 3.6% decline over the past 12 months. Statutory earnings per share are expected to tumble 38% to JP¥184 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥205.0b and earnings per share (EPS) of JP¥176 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of JP¥1,620, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Pacific Industrial at JP¥1,900 per share, while the most bearish prices it at JP¥1,500. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.7% by the end of 2025. This indicates a significant reduction from annual growth of 6.6% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Pacific Industrial is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Pacific Industrial following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Pacific Industrial. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Pacific Industrial analysts - going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Pacific Industrial (1 is a bit concerning!) that you need to take into consideration.

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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.

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