Revenue Beat: Hanwa Co., Ltd. Beat Analyst Estimates By 8.3%

Investors in Hanwa Co., Ltd. (TSE:8078) had a good week, as its shares rose 6.6% to close at JP¥5,020 following the release of its third-quarter results. It was a workmanlike result, with revenues of JP¥661b coming in 8.3% ahead of expectations, and statutory earnings per share of JP¥945, in line with analyst appraisals. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Hanwa

Following last week's earnings report, Hanwa's three analysts are forecasting 2026 revenues to be JP¥2.51t, approximately in line with the last 12 months. Statutory earnings per share are predicted to increase 7.7% to JP¥1,053. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥2.47t and earnings per share (EPS) of JP¥1,040 in 2026. 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥6,100. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Hanwa at JP¥7,500 per share, while the most bearish prices it at JP¥5,300. 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 Hanwa shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 0.4% annualised decline to the end of 2026. That is a notable change from historical growth of 8.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.2% per year. It's pretty clear that Hanwa's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Hanwa'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.

With that in mind, we wouldn't be too quick to come to a conclusion on Hanwa. Long-term earnings power is much more important than next year's profits. We have forecasts for Hanwa going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Hanwa (1 can't be ignored!) that you need to be mindful 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.