Kotobuki Spirits Co., Ltd. (TSE:2222) Just Reported, And Analysts Assigned A JP¥2,757 Price Target

It's been a sad week for Kotobuki Spirits Co., Ltd. (TSE:2222), who've watched their investment drop 18% to JP¥1,594 in the week since the company reported its first-quarter result. Kotobuki Spirits reported in line with analyst predictions, delivering revenues of JP¥16b and statutory earnings per share of JP¥69.61, suggesting the business is executing well and in line with its plan. 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 Kotobuki Spirits after the latest results.

View our latest analysis for Kotobuki Spirits

Following the latest results, Kotobuki Spirits' three analysts are now forecasting revenues of JP¥76.0b in 2025. This would be a decent 16% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 18% to JP¥83.63. In the lead-up to this report, the analysts had been modelling revenues of JP¥72.9b and earnings per share (EPS) of JP¥82.70 in 2025. There doesn't appear to have been a major change in sentiment following the results, other than the small lift in revenue estimates.

Even though revenue forecasts increased, the consensus price target 11% to JP¥2,757, perhaps suggesting thatthe analysts have become more pessimistic about the lack of earnings growth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Kotobuki Spirits at JP¥3,270 per share, while the most bearish prices it at JP¥2,300. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. It's clear from the latest estimates that Kotobuki Spirits' rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 12% 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 3.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Kotobuki Spirits to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Kotobuki Spirits 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.

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