Asahi Kasei Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Asahi Kasei Corporation (TSE:3407) just released its latest quarterly results and things are looking bullish. The company beat forecasts, with revenue of JP¥736b, some 4.0% above estimates, and statutory earnings per share (EPS) coming in at JP¥24.59, 32% ahead of expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Asahi Kasei after the latest results.

View our latest analysis for Asahi Kasei

Taking into account the latest results, the consensus forecast from Asahi Kasei's ten analysts is for revenues of JP¥2.99t in 2025. This reflects a reasonable 4.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 65% to JP¥81.32. Before this earnings report, the analysts had been forecasting revenues of JP¥2.94t and earnings per share (EPS) of JP¥76.03 in 2025. So the consensus seems to have become somewhat more optimistic on Asahi Kasei's earnings potential following these results.

The consensus price target was unchanged at JP¥1,239, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on Asahi Kasei, with the most bullish analyst valuing it at JP¥1,500 and the most bearish at JP¥1,020 per share. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Asahi Kasei's revenue growth is expected to slow, with the forecast 5.5% annualised growth rate until the end of 2025 being well below the historical 6.9% p.a. growth over the last five years. Compare this to the 160 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.7% per year. So it's pretty clear that, while Asahi Kasei'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 here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Asahi Kasei following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at JP¥1,239, 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 estimates - from multiple Asahi Kasei analysts - going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Asahi Kasei that you need to take into consideration.

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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.

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