Earnings Miss: Shiseido Company, Limited Missed EPS By 48% And Analysts Are Revising Their Forecasts

There's been a major selloff in Shiseido Company, Limited (TSE:4911) shares in the week since it released its interim report, with the stock down 26% to JP¥3,350. Statutory earnings per share fell badly short of expectations, coming in at JP¥8.26, some 48% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at JP¥509b. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Shiseido Company

Taking into account the latest results, the most recent consensus for Shiseido Company from twelve analysts is for revenues of JP¥1.04t in 2024. If met, it would imply a satisfactory 5.7% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 148% to JP¥61.99. Before this earnings report, the analysts had been forecasting revenues of JP¥1.05t and earnings per share (EPS) of JP¥64.66 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at JP¥5,201, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Shiseido Company analyst has a price target of JP¥6,200 per share, while the most pessimistic values it at JP¥3,600. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Shiseido Company is forecast to grow faster in the future than it has in the past, with revenues expected to display 12% annualised growth until the end of 2024. If achieved, this would be a much better result than the 1.2% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.9% annually. Not only are Shiseido Company's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shiseido Company. Happily, there were no major changes to revenue forecasts, with the business still 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 Shiseido Company. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Shiseido Company analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Shiseido Company that 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.