One Analyst's Earnings Estimates For Nippon Carbon Co., Ltd. (TSE:5302) Are Surging Higher

Shareholders in Nippon Carbon Co., Ltd. (TSE:5302) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance. The stock price has risen 6.8% to JP¥5,520 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the latest consensus from Nippon Carbon's sole analyst is for revenues of JP¥43b in 2024, which would reflect a meaningful 14% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to rise 3.7% to JP¥380. Prior to this update, the analyst had been forecasting revenues of JP¥38b and earnings per share (EPS) of JP¥235 in 2024. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.

View our latest analysis for Nippon Carbon

It will come as no surprise to learn that the analyst has increased their price target for Nippon Carbon 22% to JP¥5,500 on the back of these upgrades.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Nippon Carbon is forecast to grow faster in the future than it has in the past, with revenues expected to display 14% annualised growth until the end of 2024. If achieved, this would be a much better result than the 7.2% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 4.4% per year. Not only are Nippon Carbon's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Nippon Carbon could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.