Results: Ajinomoto Co., Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Investors in Ajinomoto Co., Inc. (TSE:2802) had a good week, as its shares rose 9.4% to close at JP¥6,316 following the release of its half-yearly results. It looks like a credible result overall - although revenues of JP¥744b were in line with what the analysts predicted, Ajinomoto surprised by delivering a statutory profit of JP¥51.96 per share, a notable 18% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Ajinomoto

Taking into account the latest results, the current consensus from Ajinomoto's twelve analysts is for revenues of JP¥1.54t in 2025. This would reflect a credible 3.2% increase on its revenue over the past 12 months. Per-share earnings are expected to ascend 11% to JP¥201. Before this earnings report, the analysts had been forecasting revenues of JP¥1.54t and earnings per share (EPS) of JP¥198 in 2025. 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥6,514. 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. There are some variant perceptions on Ajinomoto, with the most bullish analyst valuing it at JP¥8,000 and the most bearish at JP¥5,300 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Ajinomoto shareholders.

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. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 6.6% growth on an annualised basis. That is in line with its 7.4% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 3.7% annually. So it's pretty clear that Ajinomoto is forecast to grow substantially faster than its industry.

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, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Ajinomoto. Long-term earnings power is much more important than next year's profits. We have forecasts for Ajinomoto going out to 2027, and you can see them free on our platform here.

It might also be worth considering whether Ajinomoto's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.