Penta-Ocean Construction Co., Ltd. Just Beat Revenue By 9.4%: Here's What Analysts Think Will Happen Next

It's been a good week for Penta-Ocean Construction Co., Ltd. (TSE:1893) shareholders, because the company has just released its latest first-quarter results, and the shares gained 3.4% to JP¥630. Results overall were respectable, with statutory earnings of JP¥62.73 per share roughly in line with what the analysts had forecast. Revenues of JP¥154b came in 9.4% 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Penta-Ocean Construction

Following last week's earnings report, Penta-Ocean Construction's six analysts are forecasting 2025 revenues to be JP¥655.7b, approximately in line with the last 12 months. Per-share earnings are expected to increase 10.0% to JP¥71.50. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥654.8b and earnings per share (EPS) of JP¥72.93 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¥872, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Penta-Ocean Construction at JP¥960 per share, while the most bearish prices it at JP¥810. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Penta-Ocean Construction's past performance and to peers in the same industry. The analysts are definitely expecting Penta-Ocean Construction's growth to accelerate, with the forecast 2.3% annualised growth to the end of 2025 ranking favourably alongside historical growth of 0.7% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 2.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Penta-Ocean Construction is expected to grow at about the same rate as 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at JP¥872, with the latest estimates not enough to have an impact on their price targets.

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. We have estimates - from multiple Penta-Ocean Construction analysts - going out to 2027, 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 Penta-Ocean Construction (1 shouldn't be ignored) you should be aware of.

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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.