JP¥1,400: That's What Analysts Think Kanto Denka Kogyo Co., Ltd. (TSE:4047) Is Worth After Its Latest Results

Kanto Denka Kogyo Co., Ltd. (TSE:4047) shareholders are probably feeling a little disappointed, since its shares fell 4.4% to JP¥896 in the week after its latest third-quarter results. Revenues were JP¥15b, with Kanto Denka Kogyo reporting some 4.0% below analyst expectations. Following the result, the analyst has 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 gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.

View our latest analysis for Kanto Denka Kogyo

Taking into account the latest results, the current consensus from Kanto Denka Kogyo's sole analyst is for revenues of JP¥67.0b in 2026. This would reflect a satisfactory 7.5% increase on its revenue over the past 12 months. Earnings are expected to improve, with Kanto Denka Kogyo forecast to report a statutory profit of JP¥69.60 per share. Yet prior to the latest earnings, the analyst had been anticipated revenues of JP¥70.0b and earnings per share (EPS) of JP¥49.60 in 2026. While revenue forecasts have been revised downwards, the analyst looks to have become more optimistic on the company's cost base, given the considerable lift to to the earnings per share numbers.

The analyst has cut their price target 6.7% to JP¥1,400per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kanto Denka Kogyo's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Kanto Denka Kogyo'shistorical trends, as the 5.9% annualised revenue growth to the end of 2026 is roughly in line with the 6.4% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 5.0% per year. It's clear that while Kanto Denka Kogyo's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Kanto Denka Kogyo's earnings potential next year. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Yet - earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Kanto Denka Kogyo's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

You can also see whether Kanto Denka Kogyo is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.