Results: Pigeon Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates

Investors in Pigeon Corporation (TSE:7956) had a good week, as its shares rose 7.7% to close at JP¥1,831 following the release of its first-quarter results. It looks like a credible result overall - although revenues of JP¥25b were in line with what the analysts predicted, Pigeon surprised by delivering a statutory profit of JP¥19.49 per share, a notable 15% above expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Pigeon after the latest results.

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After the latest results, the ten analysts covering Pigeon are now predicting revenues of JP¥108.6b in 2025. If met, this would reflect a reasonable 2.8% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be JP¥73.09, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of JP¥108.8b and earnings per share (EPS) of JP¥72.88 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.

View our latest analysis for Pigeon

The analysts reconfirmed their price target of JP¥1,790, showing that the business is executing well and in line with expectations. 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. The most optimistic Pigeon analyst has a price target of JP¥2,200 per share, while the most pessimistic values it at JP¥1,600. 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. We can infer from the latest estimates that forecasts expect a continuation of Pigeon'shistorical trends, as the 3.8% annualised revenue growth to the end of 2025 is roughly in line with the 3.5% annual growth over the past three years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 4.9% annually. So it's pretty clear that Pigeon is expected to grow slower than similar companies in the same 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, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Pigeon's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥1,790, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Pigeon going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign 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.