Earnings Miss: Kobe Bussan Co., Ltd. Missed EPS By 42% And Analysts Are Revising Their Forecasts

Kobe Bussan Co., Ltd. (TSE:3038) came out with its half-yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results overall were not great, with earnings of JP¥16.62 per share falling drastically short of analyst expectations. Meanwhile revenues hit JP¥272b and were slightly better than forecasts. 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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After the latest results, the nine analysts covering Kobe Bussan are now predicting revenues of JP¥547.6b in 2025. If met, this would reflect a modest 2.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 18% to JP¥125. In the lead-up to this report, the analysts had been modelling revenues of JP¥545.6b and earnings per share (EPS) of JP¥123 in 2025. 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.

View our latest analysis for Kobe Bussan

There were no changes to revenue or earnings estimates or the price target of JP¥4,078, suggesting that the company has met expectations in its recent result. 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. There are some variant perceptions on Kobe Bussan, with the most bullish analyst valuing it at JP¥5,050 and the most bearish at JP¥3,700 per share. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kobe Bussan's past performance and to peers in the same industry. We would highlight that Kobe Bussan's revenue growth is expected to slow, with the forecast 5.9% annualised growth rate until the end of 2025 being well below the historical 10% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 1.6% per year. So it's pretty clear that, while Kobe Bussan's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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 major changes to revenue forecasts, with the business still 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.

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 Kobe Bussan analysts - going out to 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.