The KH Neochem Co., Ltd. (TSE:4189) Third-Quarter Results Are Out And Analysts Have Published New Forecasts

KH Neochem Co., Ltd. (TSE:4189) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was a workmanlike result, with revenues of JP¥31b coming in 2.4% ahead of expectations, and statutory earnings per share of JP¥184, in line with analyst appraisals. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for KH Neochem

Taking into account the latest results, the consensus forecast from KH Neochem's three analysts is for revenues of JP¥126.9b in 2025. This reflects a meaningful 8.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 37% to JP¥262. Before this earnings report, the analysts had been forecasting revenues of JP¥126.7b and earnings per share (EPS) of JP¥273 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at JP¥2,833, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values KH Neochem at JP¥3,600 per share, while the most bearish prices it at JP¥2,200. 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. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 7.1% growth on an annualised basis. That is in line with its 7.0% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.1% per year. So although KH Neochem is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on KH Neochem. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for KH Neochem going out to 2026, and you can see them free on our platform here..

You can also view our analysis of KH Neochem's balance sheet, and whether we think KH Neochem 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.