Revenue Miss: Kurita Water Industries Ltd. Fell 5.7% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

The analysts might have been a bit too bullish on Kurita Water Industries Ltd. (TSE:6370), given that the company fell short of expectations when it released its quarterly results last week. Kurita Water Industries missed analyst forecasts, with revenues of JP¥92b and statutory earnings per share (EPS) of JP¥50.84, falling short by 5.7% and 3.9% respectively. 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.

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Taking into account the latest results, the current consensus from Kurita Water Industries' seven analysts is for revenues of JP¥422.8b in 2026. This would reflect a reasonable 3.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 75% to JP¥320. Before this earnings report, the analysts had been forecasting revenues of JP¥423.2b and earnings per share (EPS) of JP¥320 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

See our latest analysis for Kurita Water Industries

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥6,497. 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 Kurita Water Industries analyst has a price target of JP¥7,800 per share, while the most pessimistic values it at JP¥5,000. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Kurita Water Industries' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 5.3% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.7% annually. Factoring in the forecast slowdown in growth, it looks like Kurita Water Industries 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. The consensus price target held steady at JP¥6,497, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Kurita Water Industries analysts - going out to 2028, and you can see them free on our platform here.

Even so, be aware that Kurita Water Industries is showing 3 warning signs 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.