Earnings Update: AGC Inc. (TSE:5201) Just Reported Its Half-Yearly Results And Analysts Are Updating Their Forecasts

AGC Inc. (TSE:5201) shareholders are probably feeling a little disappointed, since its shares fell 8.2% to JP¥4,751 in the week after its latest half-yearly results. Results were roughly in line with estimates, with revenues of JP¥1.0t and statutory earnings per share of JP¥305. 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.

Check out our latest analysis for AGC

Taking into account the latest results, the most recent consensus for AGC from nine analysts is for revenues of JP¥2.10t in 2024. If met, it would imply a modest 2.4% increase on its revenue over the past 12 months. Earnings are expected to improve, with AGC forecast to report a statutory profit of JP¥263 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥2.10t and earnings per share (EPS) of JP¥264 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.

There were no changes to revenue or earnings estimates or the price target of JP¥5,868, 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. There are some variant perceptions on AGC, with the most bullish analyst valuing it at JP¥6,300 and the most bearish at JP¥5,300 per share. 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.

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. It's pretty clear that there is an expectation that AGC's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.8% growth on an annualised basis. This is compared to a historical growth rate of 8.7% over the past five years. Compare this to the 61 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.3% per year. Factoring in the forecast slowdown in growth, it looks like AGC is forecast 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. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.

With that in mind, we wouldn't be too quick to come to a conclusion on AGC. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple AGC analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that AGC is showing 1 warning sign in our investment analysis , you should know about...

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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.

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