Analysts Just Made A Substantial Upgrade To Their Kagome Co., Ltd. (TSE:2811) Forecasts

Kagome Co., Ltd. (TSE:2811) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

After the upgrade, the dual analysts covering Kagome are now predicting revenues of JP¥321b in 2024. If met, this would reflect a sizeable 43% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 123% to JP¥270. Prior to this update, the analysts had been forecasting revenues of JP¥288b and earnings per share (EPS) of JP¥210 in 2024. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Check out our latest analysis for Kagome

With these upgrades, we're not surprised to see that the analysts have lifted their price target 12% to JP¥4,660 per share.

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. The analysts are definitely expecting Kagome's growth to accelerate, with the forecast 61% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Kagome is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Kagome.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Kagome that suggests the company could be somewhat undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.