The Kokuyo Co., Ltd. (TSE:7984) Interim Results Are Out And Analysts Have Published New Forecasts

As you might know, Kokuyo Co., Ltd. (TSE:7984) recently reported its half-year numbers. Results were roughly in line with estimates, with revenues of JP¥179b and statutory earnings per share of JP¥166. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Kokuyo

Following the latest results, Kokuyo's one analyst are now forecasting revenues of JP¥345.0b in 2024. This would be a credible 3.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to shrink 6.3% to JP¥190 in the same period. Yet prior to the latest earnings, the analyst had been anticipated revenues of JP¥348.0b and earnings per share (EPS) of JP¥207 in 2024. The analyst seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at JP¥3,100, with the analyst seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Kokuyo's rate of growth is expected to accelerate meaningfully, with the forecast 6.8% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Kokuyo is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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 analyst estimates for Kokuyo going out as far as 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Kokuyo that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com