Sapporo Holdings Limited (TSE:2501) Released Earnings Last Week And Analysts Lifted Their Price Target To JP¥5,495

It's been a pretty great week for Sapporo Holdings Limited (TSE:2501) shareholders, with its shares surging 16% to JP¥7,045 in the week since its latest half-yearly results. It was a credible result overall, with revenues of JP¥248b and statutory earnings per share of JP¥112 both in line with analyst estimates, showing that Sapporo Holdings is executing in line with expectations. 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.

See our latest analysis for Sapporo Holdings

Following last week's earnings report, Sapporo Holdings' four analysts are forecasting 2024 revenues to be JP¥530.3b, approximately in line with the last 12 months. Statutory earnings per share are forecast to plummet 43% to JP¥146 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥530.5b and earnings per share (EPS) of JP¥146 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 11% to JP¥5,495despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Sapporo Holdings' earnings by assigning a price premium. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Sapporo Holdings at JP¥6,100 per share, while the most bearish prices it at JP¥5,000. This is a very narrow spread of estimates, implying either that Sapporo Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Sapporo Holdings' revenue growth is expected to slow, with the forecast 1.0% annualised growth rate until the end of 2024 being well below the historical 1.6% 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 1.9% per year. Factoring in the forecast slowdown in growth, it seems obvious that Sapporo Holdings is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Sapporo Holdings' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Sapporo Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Sapporo Holdings analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Sapporo Holdings that we have uncovered.

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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.