Earnings Miss: Oriental Land Co., Ltd. Missed EPS By 6.3% And Analysts Are Revising Their Forecasts

As you might know, Oriental Land Co., Ltd. (TSE:4661) last week released its latest first-quarter, and things did not turn out so great for shareholders. Results look to have been somewhat negative - revenue fell 3.6% short of analyst estimates at JP¥148b, and statutory earnings of JP¥14.92 per share missed forecasts by 6.3%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Oriental Land after the latest results.

View our latest analysis for Oriental Land

Taking into account the latest results, the current consensus from Oriental Land's 17 analysts is for revenues of JP¥711.1b in 2025. This would reflect a meaningful 14% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 11% to JP¥79.54. Before this earnings report, the analysts had been forecasting revenues of JP¥710.8b and earnings per share (EPS) of JP¥81.89 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at JP¥5,184, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Oriental Land at JP¥6,500 per share, while the most bearish prices it at JP¥3,300. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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 clear from the latest estimates that Oriental Land's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 9.1% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Oriental Land is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Oriental Land. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Oriental Land. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Oriental Land 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.

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