MonotaRO Co., Ltd. (TSE:3064) Just Released Its Interim Results And Analysts Are Updating Their Estimates

Investors in MonotaRO Co., Ltd. (TSE:3064) had a good week, as its shares rose 6.2% to close at JP¥2,174 following the release of its half-year results. MonotaRO reported in line with analyst predictions, delivering revenues of JP¥139b and statutory earnings per share of JP¥12.56, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on MonotaRO after the latest results.

See our latest analysis for MonotaRO

After the latest results, the nine analysts covering MonotaRO are now predicting revenues of JP¥287.1b in 2024. If met, this would reflect a reasonable 6.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 8.8% to JP¥51.32. Before this earnings report, the analysts had been forecasting revenues of JP¥286.8b and earnings per share (EPS) of JP¥51.25 in 2024. 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥1,738. 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. The most optimistic MonotaRO analyst has a price target of JP¥2,200 per share, while the most pessimistic values it at JP¥1,400. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the MonotaRO's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of MonotaRO'shistorical trends, as the 14% annualised revenue growth to the end of 2024 is roughly in line with the 16% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 0.2% annually. So although MonotaRO is expected to maintain its revenue growth rate, it's definitely expected to grow faster 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. 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.

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 forecasts for MonotaRO going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with MonotaRO .

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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.

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