Earnings Release: Here's Why Analysts Cut Their Oriental Land Co., Ltd. (TSE:4661) Price Target To JP¥4,026

Shareholders might have noticed that Oriental Land Co., Ltd. (TSE:4661) filed its full-year result this time last week. The early response was not positive, with shares down 3.2% to JP¥3,033 in the past week. Oriental Land reported JP¥679b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of JP¥75.62 beat expectations, being 3.6% higher than what the analysts expected. 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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Taking into account the latest results, the consensus forecast from Oriental Land's 17 analysts is for revenues of JP¥708.7b in 2026. This reflects a modest 4.3% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be JP¥75.20, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of JP¥730.2b and earnings per share (EPS) of JP¥82.13 in 2026. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

See our latest analysis for Oriental Land

The consensus price target fell 6.0% to JP¥4,026, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Oriental Land at JP¥5,500 per share, while the most bearish prices it at JP¥2,610. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We would highlight that Oriental Land's revenue growth is expected to slow, with the forecast 4.3% annualised growth rate until the end of 2026 being well below the historical 22% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.7% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Oriental Land.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Oriental Land's future valuation.

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 estimates - from multiple Oriental Land analysts - going out to 2028, 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.