One Universal Entertainment Corporation (TSE:6425) Analyst Just Made A Major Cut To Next Year's Estimates

The analyst covering Universal Entertainment Corporation (TSE:6425) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

Following the latest downgrade, the lone analyst covering Universal Entertainment provided consensus estimates of JP¥155b revenue in 2024, which would reflect a measurable 4.8% decline on its sales over the past 12 months. Statutory earnings per share are supposed to fall 14% to JP¥89.20 in the same period. Previously, the analyst had been modelling revenues of JP¥196b and earnings per share (EPS) of JP¥209 in 2024. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Universal Entertainment

It'll come as no surprise then, to learn that the analyst has cut their price target 32% to JP¥1,900.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 9.4% by the end of 2024. This indicates a significant reduction from annual growth of 11% 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 7.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Universal Entertainment is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Universal Entertainment. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Universal Entertainment's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Universal Entertainment.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Universal Entertainment going out as far as 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.