Kobayashi Pharmaceutical Co., Ltd. Just Missed EPS By 14%: Here's What Analysts Think Will Happen Next

Kobayashi Pharmaceutical Co., Ltd. (TSE:4967) last week reported its latest half-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was not a great result overall. While revenues of JP¥69b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 14% to hit JP¥20.75 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the current consensus from Kobayashi Pharmaceutical's seven analysts is for revenues of JP¥170.3b in 2025. This would reflect a credible 5.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 2.3% to JP¥162. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥170.7b and earnings per share (EPS) of JP¥166 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

Check out our latest analysis for Kobayashi Pharmaceutical

The consensus price target held steady at JP¥5,568, 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 Kobayashi Pharmaceutical analyst has a price target of JP¥6,700 per share, while the most pessimistic values it at JP¥5,000. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. It's clear from the latest estimates that Kobayashi Pharmaceutical's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 2.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Kobayashi Pharmaceutical is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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.

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 Kobayashi Pharmaceutical going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for Kobayashi Pharmaceutical 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.