Earnings Miss: Kuraray Co., Ltd. Missed EPS By 35% And Analysts Are Revising Their Forecasts

As you might know, Kuraray Co., Ltd. (TSE:3405) last week released its latest quarterly, and things did not turn out so great for shareholders. Results showed a clear earnings miss, with JP¥193b revenue coming in 9.2% lower than what the analystsexpected. Statutory earnings per share (EPS) of JP¥27.85 missed the mark badly, arriving some 35% below what was expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Taking into account the latest results, the current consensus from Kuraray's ten analysts is for revenues of JP¥873.8b in 2026. This would reflect a meaningful 8.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 564% to JP¥170. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥872.9b and earnings per share (EPS) of JP¥169 in 2026. 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 Kuraray

The analysts reconfirmed their price target of JP¥2,121, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Kuraray at JP¥3,100 per share, while the most bearish prices it at JP¥1,550. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 pretty clear that there is an expectation that Kuraray's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 6.7% growth on an annualised basis. This is compared to a historical growth rate of 8.8% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.2% per year. So it's pretty clear that, while Kuraray's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. 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 Kuraray. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Kuraray analysts - going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Kuraray that you need to be mindful of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.