Kanto Denka Kogyo Co., Ltd. (TSE:4047) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Kanto Denka Kogyo Co., Ltd. (TSE:4047) shareholders are probably feeling a little disappointed, since its shares fell 4.5% to JP¥931 in the week after its latest interim results. The analyst 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. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.

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¥64.0b in 2025. This would reflect a reasonable 4.6% 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¥54.00 per share. In the lead-up to this report, the analyst had been modelling revenues of JP¥69.0b and earnings per share (EPS) of JP¥64.40 in 2025. The analyst seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

It'll come as no surprise then, to learn that the analyst has cut their price target 17% to JP¥1,500.

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. The analyst is definitely expecting Kanto Denka Kogyo's growth to accelerate, with the forecast 9.4% annualised growth to the end of 2025 ranking favourably alongside historical growth of 7.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Kanto Denka Kogyo is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kanto Denka Kogyo. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 analyst estimates for Kanto Denka Kogyo going out as far as 2027, and you can see them free on our platform here.

You can also view our analysis of Kanto Denka Kogyo's balance sheet, and whether we think Kanto Denka Kogyo is carrying too much debt, 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.