Analysts Are Updating Their Kumagai Gumi Co.,Ltd. (TSE:1861) Estimates After Its First-Quarter Results

The first-quarter results for Kumagai Gumi Co.,Ltd. (TSE:1861) were released last week, making it a good time to revisit its performance. Results look mixed - while revenue fell marginally short of analyst estimates at JP¥103b, statutory earnings were in line with expectations, at JP¥192 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Kumagai GumiLtd after the latest results.

View our latest analysis for Kumagai GumiLtd

Following the latest results, Kumagai GumiLtd's five analysts are now forecasting revenues of JP¥466.8b in 2025. This would be an okay 2.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 41% to JP¥274. Before this earnings report, the analysts had been forecasting revenues of JP¥466.0b and earnings per share (EPS) of JP¥279 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of JP¥4,232, suggesting that the company has met expectations in its recent result. 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 Kumagai GumiLtd at JP¥5,100 per share, while the most bearish prices it at JP¥3,110. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Kumagai GumiLtd shareholders.

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 Kumagai GumiLtd is forecast to grow faster in the future than it has in the past, with revenues expected to display 3.5% annualised growth until the end of 2025. If achieved, this would be a much better result than the 0.08% 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 2.1% annually. So it looks like Kumagai GumiLtd is expected to grow faster than its competitors, at least for a while.

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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Kumagai GumiLtd analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Kumagai GumiLtd that we have uncovered.

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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.