Analysts Are Updating Their Kubota Corporation (TSE:6326) Estimates After Its First-Quarter Results

Last week, you might have seen that Kubota Corporation (TSE:6326) released its quarterly result to the market. The early response was not positive, with shares down 5.3% to JP¥2,388 in the past week. It was a credible result overall, with revenues of JP¥775b and statutory earnings per share of JP¥62.06 both in line with analyst estimates, showing that Kubota is executing in line with expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Kubota after the latest results.

View our latest analysis for Kubota

Taking into account the latest results, Kubota's eleven analysts currently expect revenues in 2024 to be JP¥3.05t, approximately in line with the last 12 months. Statutory earnings per share are forecast to decrease 8.3% to JP¥189 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥3.05t and earnings per share (EPS) of JP¥185 in 2024. So the consensus seems to have become somewhat more optimistic on Kubota's earnings potential following these results.

There's been no major changes to the consensus price target of JP¥2,677, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. There are some variant perceptions on Kubota, with the most bullish analyst valuing it at JP¥3,100 and the most bearish at JP¥1,800 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Kubota shareholders.

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. We would highlight that Kubota's revenue growth is expected to slow, with the forecast 1.7% annualised growth rate until the end of 2024 being well below the historical 12% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.7% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Kubota.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Kubota'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 Kubota's revenue is expected to perform worse 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.

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

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Kubota (1 is concerning) you should be aware of.

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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.