Asahi Kasei Corporation Just Missed Earnings - But Analysts Have Updated Their Models

Investors in Asahi Kasei Corporation (TSE:3407) had a good week, as its shares rose 3.4% to close at JP¥1,077 following the release of its first-quarter results. Statutory earnings per share fell badly short of expectations, coming in at JP¥14.52, some 24% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at JP¥738b. 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.

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Following last week's earnings report, Asahi Kasei's twelve analysts are forecasting 2026 revenues to be JP¥3.10t, approximately in line with the last 12 months. Per-share earnings are expected to increase 6.8% to JP¥94.85. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥3.12t and earnings per share (EPS) of JP¥95.56 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.

Check out our latest analysis for Asahi Kasei

There were no changes to revenue or earnings estimates or the price target of JP¥1,344, suggesting that the company has met expectations in its recent result. 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. There are some variant perceptions on Asahi Kasei, with the most bullish analyst valuing it at JP¥1,550 and the most bearish at JP¥1,050 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Asahi Kasei shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Asahi Kasei's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 2.6% growth on an annualised basis. This is compared to a historical growth rate of 8.0% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.0% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Asahi Kasei.

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 Asahi Kasei's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥1,344, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Asahi Kasei analysts - going out to 2028, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Asahi Kasei you should know about.

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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.