Results: JAFCO Group Co., Ltd. Exceeded Expectations And The Consensus Has Updated Its Estimates

It's been a pretty great week for JAFCO Group Co., Ltd. (TSE:8595) shareholders, with its shares surging 16% to JP¥2,413 in the week since its latest full-year results. JAFCO Group reported JP¥30b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of JP¥176 beat expectations, being 7.7% higher than what the analysts expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the current consensus, from the two analysts covering JAFCO Group, is for revenues of JP¥29.0b in 2026. This implies a discernible 2.3% reduction in JAFCO Group's revenue over the past 12 months. Statutory earnings per share are predicted to step up 13% to JP¥198. In the lead-up to this report, the analysts had been modelling revenues of JP¥32.0b and earnings per share (EPS) of JP¥192 in 2026. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

View our latest analysis for JAFCO Group

The consensus has made no major changes to the price target of JP¥2,170, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the JAFCO Group's past performance and to peers in the same industry. One more thing stood out to us about these estimates, and it's the idea that JAFCO Group's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 2.3% to the end of 2026. This tops off a historical decline of 1.9% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 1.9% per year. So while a broad number of companies are forecast to grow, unfortunately JAFCO Group is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around JAFCO Group's earnings potential next year. 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. With that said, earnings are more important to the long-term value of the business. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for JAFCO Group you should be aware of.

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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.