ROYAL HOLDINGS Co., Ltd. (TSE:8179) Just Reported Earnings, And Analysts Cut Their Target Price

It's been a good week for ROYAL HOLDINGS Co., Ltd. (TSE:8179) shareholders, because the company has just released its latest first-quarter results, and the shares gained 4.3% to JP¥2,599. Results overall were respectable, with statutory earnings of JP¥76.82 per share roughly in line with what the analysts had forecast. Revenues of JP¥36b came in 4.7% ahead of analyst predictions. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on ROYAL HOLDINGS after the latest results.

See our latest analysis for ROYAL HOLDINGS

Taking into account the latest results, the current consensus from ROYAL HOLDINGS' twin analysts is for revenues of JP¥149.0b in 2024. This would reflect a modest 4.2% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 5.8% to JP¥94.45. Before this earnings report, the analysts had been forecasting revenues of JP¥147.3b and earnings per share (EPS) of JP¥89.75 in 2024. So the consensus seems to have become somewhat more optimistic on ROYAL HOLDINGS' earnings potential following these results.

The consensus price target fell 7.1% to JP¥2,600, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns.

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. For example, we noticed that ROYAL HOLDINGS' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 5.7% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 1.3% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.0% annually for the foreseeable future. Although ROYAL HOLDINGS' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around ROYAL HOLDINGS' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ROYAL HOLDINGS' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for ROYAL HOLDINGS going out as far as 2026, 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.