Earnings Miss: Pigeon Corporation Missed EPS By 20% And Analysts Are Revising Their Forecasts

Pigeon Corporation (TSE:7956) missed earnings with its latest third-quarter results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at JP¥25b, statutory earnings missed forecasts by 20%, coming in at just JP¥15.49 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Pigeon

Taking into account the latest results, the consensus forecast from Pigeon's nine analysts is for revenues of JP¥106.1b in 2025. This reflects a meaningful 8.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 54% to JP¥71.49. Before this earnings report, the analysts had been forecasting revenues of JP¥106.1b and earnings per share (EPS) of JP¥72.53 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.

There were no changes to revenue or earnings estimates or the price target of JP¥1,618, suggesting that the company has met expectations in its recent result. 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. There are some variant perceptions on Pigeon, with the most bullish analyst valuing it at JP¥1,900 and the most bearish at JP¥1,200 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Pigeon's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Pigeon is forecast to grow faster in the future than it has in the past, with revenues expected to display 7.0% annualised growth until the end of 2025. If achieved, this would be a much better result than the 1.5% 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 5.9% annually. So while Pigeon's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall 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. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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 Pigeon. Long-term earnings power is much more important than next year's profits. We have forecasts for Pigeon 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 3 warning signs for Pigeon 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.