Earnings Update: Welcia Holdings Co., Ltd. (TSE:3141) Just Reported Its Yearly Results And Analysts Are Updating Their Forecasts

The yearly results for Welcia Holdings Co., Ltd. (TSE:3141) were released last week, making it a good time to revisit its performance. Welcia Holdings reported in line with analyst predictions, delivering revenues of JP¥1.2t and statutory earnings per share of JP¥128, suggesting the business is executing well and in line with its plan. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Welcia Holdings

After the latest results, the eleven analysts covering Welcia Holdings are now predicting revenues of JP¥1.28t in 2025. If met, this would reflect a credible 4.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 3.1% to JP¥132. In the lead-up to this report, the analysts had been modelling revenues of JP¥1.28t and earnings per share (EPS) of JP¥132 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥2,677. 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 Welcia Holdings analyst has a price target of JP¥3,200 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 Welcia Holdings shareholders.

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. It's pretty clear that there is an expectation that Welcia Holdings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.8% growth on an annualised basis. This is compared to a historical growth rate of 9.0% over the past five years. Compare this to the 119 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.4% per year. Factoring in the forecast slowdown in growth, it looks like Welcia Holdings is forecast to grow at about the same rate as 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. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at JP¥2,677, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Welcia Holdings going out to 2027, and you can see them free on our platform here.

It might also be worth considering whether Welcia Holdings' debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.