Kuraray Co., Ltd. Just Beat EPS By 19%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Kuraray Co., Ltd. (TSE:3405) released its third-quarter result to the market. The early response was not positive, with shares down 6.6% to JP¥1,998 in the past week. Revenues JP¥204b disappointed slightly, at6.1% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of JP¥49.63 coming in 19% above what was anticipated. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Kuraray

Taking into account the latest results, the consensus forecast from Kuraray's ten analysts is for revenues of JP¥872.6b in 2025. This reflects a modest 6.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to climb 16% to JP¥188. In the lead-up to this report, the analysts had been modelling revenues of JP¥875.0b and earnings per share (EPS) of JP¥187 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥2,309. 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. The most optimistic Kuraray analyst has a price target of JP¥2,640 per share, while the most pessimistic values it at JP¥1,920. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Kuraray's revenue growth is expected to slow, with the forecast 5.0% annualised growth rate until the end of 2025 being well below the historical 9.4% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.2% annually. So it's pretty clear that, while Kuraray's revenue growth is expected to slow, it's expected to grow roughly in line with the 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Kuraray going out to 2026, and you can see them free on our platform here.

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