The CKD Corporation (TSE:6407) Half-Year Results Are Out And Analysts Have Published New Forecasts

Shareholders in CKD Corporation (TSE:6407) had a terrible week, as shares crashed 21% to JP¥2,562 in the week since its latest half-yearly results. It was a credible result overall, with revenues of JP¥73b and statutory earnings per share of JP¥43.39 both in line with analyst estimates, showing that CKD is executing in line with expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Following last week's earnings report, CKD's twelve analysts are forecasting 2026 revenues to be JP¥153.9b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be JP¥189, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥155.1b and earnings per share (EPS) of JP¥196 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

See our latest analysis for CKD

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥3,177, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 CKD analyst has a price target of JP¥4,200 per share, while the most pessimistic values it at JP¥2,300. 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 CKD shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that CKD's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 1.9% growth on an annualised basis. This is compared to a historical growth rate of 6.1% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that CKD is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that CKD'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.

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 CKD going out to 2028, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for CKD that we have uncovered.

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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.