Earnings Update: Here's Why Analysts Just Lifted Their Osaka Organic Chemical Industry Ltd. (TSE:4187) Price Target To JP¥3,448

Osaka Organic Chemical Industry Ltd. (TSE:4187) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results were roughly in line with estimates, with revenues of JP¥7.1b and statutory earnings per share of JP¥153. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Osaka Organic Chemical Industry

Taking into account the latest results, the consensus forecast from Osaka Organic Chemical Industry's six analysts is for revenues of JP¥31.3b in 2024. This reflects a satisfactory 7.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dip 7.1% to JP¥138 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥31.2b and earnings per share (EPS) of JP¥135 in 2024. So the consensus seems to have become somewhat more optimistic on Osaka Organic Chemical Industry's earnings potential following these results.

The consensus price target rose 6.8% to JP¥3,448, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Osaka Organic Chemical Industry at JP¥4,000 per share, while the most bearish prices it at JP¥2,700. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. The analysts are definitely expecting Osaka Organic Chemical Industry's growth to accelerate, with the forecast 10% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.5% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Osaka Organic Chemical Industry is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Osaka Organic Chemical Industry's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Osaka Organic Chemical Industry going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 2 warning signs for Osaka Organic Chemical Industry that you need to be mindful 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.