Earnings Update: Here's Why Analysts Just Lifted Their JGC Holdings Corporation (TSE:1963) Price Target To JP¥1,460

It's been a pretty great week for JGC Holdings Corporation (TSE:1963) shareholders, with its shares surging 10% to JP¥1,800 in the week since its latest half-yearly results. Revenue greatly exceeded expectations at JP¥381b, some 21% ahead of analyst forecasts. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the recent earnings report, the consensus from five analysts covering JGC Holdings is for revenues of JP¥718.1b in 2026. This implies a definite 14% decline in revenue compared to the last 12 months. JGC Holdings is also expected to turn profitable, with statutory earnings of JP¥110 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥706.1b and earnings per share (EPS) of JP¥103 in 2026. So the consensus seems to have become somewhat more optimistic on JGC Holdings' earnings potential following these results.

View our latest analysis for JGC Holdings

The consensus price target rose 8.1% to JP¥1,460, suggesting that higher earnings estimates flow through to the stock's valuation as well. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic JGC Holdings analyst has a price target of JP¥1,750 per share, while the most pessimistic values it at JP¥1,200. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. We would highlight that revenue is expected to reverse, with a forecast 26% annualised decline to the end of 2026. That is a notable change from historical growth of 17% 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 2.5% annually for the foreseeable future. It's pretty clear that JGC Holdings' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around JGC Holdings' 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 JGC Holdings' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 JGC Holdings going out to 2028, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with JGC Holdings (at least 1 which is a bit unpleasant) , and understanding these should be part of your investment process.

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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.