Kinden Corporation (TSE:1944) Just Released Its Yearly Results And Analysts Are Updating Their Estimates

A week ago, Kinden Corporation (TSE:1944) came out with a strong set of annual numbers that could potentially lead to a re-rate of the stock. The company beat expectations with revenues of JP¥655b arriving 3.5% ahead of forecasts. Statutory earnings per share (EPS) were JP¥165, 4.5% ahead of estimates. 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'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 Kinden

Taking into account the latest results, Kinden's five analysts currently expect revenues in 2025 to be JP¥667.0b, approximately in line with the last 12 months. Statutory earnings per share are predicted to increase 8.4% to JP¥181. In the lead-up to this report, the analysts had been modelling revenues of JP¥656.5b and earnings per share (EPS) of JP¥173 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at JP¥2,820, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Kinden analyst has a price target of JP¥3,600 per share, while the most pessimistic values it at JP¥2,200. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Kinden's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.9% growth on an annualised basis. This is compared to a historical growth rate of 2.8% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 2.6% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Kinden.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Kinden's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Kinden's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥2,820, with the latest estimates not enough to have an impact on their price targets.

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

We also provide an overview of the Kinden Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.