Fujita Kanko Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Fujita Kanko Inc. (TSE:9722) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 7.8% to hit JP¥17b. Fujita Kanko also reported a statutory profit of JP¥131, which was an impressive 142% above what the analyst had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.

See our latest analysis for Fujita Kanko

Following the latest results, Fujita Kanko's sole analyst are now forecasting revenues of JP¥73.5b in 2024. This would be a reasonable 7.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to nosedive 21% to JP¥601 in the same period. In the lead-up to this report, the analyst had been modelling revenues of JP¥69.8b and earnings per share (EPS) of JP¥501 in 2024. So it seems there's been a definite increase in optimism about Fujita Kanko's future following the latest results, with a substantial gain in the earnings per share forecasts in particular.

With these upgrades, we're not surprised to see that the analyst has lifted their price target 19% to JP¥7,350per share.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Fujita Kanko's past performance and to peers in the same industry. For example, we noticed that Fujita Kanko's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 10% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 3.1% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 7.0% per year. So it looks like Fujita Kanko is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Fujita Kanko's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Fujita Kanko. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Even so, be aware that Fujita Kanko is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

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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.