Revenue Beat: Kandenko Co.,Ltd. Exceeded Revenue Forecasts By 6.3% And Analysts Are Updating Their Estimates

Shareholders of Kandenko Co.,Ltd. (TSE:1942) will be pleased this week, given that the stock price is up 10% to JP¥1,907 following its latest first-quarter results. It was a workmanlike result, with revenues of JP¥129b coming in 6.3% ahead of expectations, and statutory earnings per share of JP¥134, in line with analyst appraisals. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for KandenkoLtd

Taking into account the latest results, KandenkoLtd's five analysts currently expect revenues in 2025 to be JP¥609.6b, approximately in line with the last 12 months. Statutory earnings per share are expected to shrink 6.5% to JP¥136 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥608.0b and earnings per share (EPS) of JP¥133 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥1,990. 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. The most optimistic KandenkoLtd analyst has a price target of JP¥2,600 per share, while the most pessimistic values it at JP¥1,600. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2025. That would be a definite improvement, given that the past five years have seen revenue shrink 1.0% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 2.5% annually. Although KandenkoLtd's revenues are expected to improve, it seems that it is still expected to grow slower than 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that KandenkoLtd'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.

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 forecasts for KandenkoLtd going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - KandenkoLtd has 1 warning sign we think 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.

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