Zeon Corporation Just Missed EPS By 37%: Here's What Analysts Think Will Happen Next

It's been a good week for Zeon Corporation (TSE:4205) shareholders, because the company has just released its latest half-year results, and the shares gained 6.8% to JP¥1,412. It looks like a pretty bad result, all things considered. Although revenues of JP¥213b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 37% to hit JP¥19.70 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Zeon after the latest results.

View our latest analysis for Zeon

Following last week's earnings report, Zeon's nine analysts are forecasting 2025 revenues to be JP¥408.3b, approximately in line with the last 12 months. Statutory earnings per share are expected to nosedive 29% to JP¥113 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥408.4b and earnings per share (EPS) of JP¥110 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at JP¥1,510, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Zeon at JP¥1,800 per share, while the most bearish prices it at JP¥1,200. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.9% by the end of 2025. This indicates a significant reduction from annual growth of 5.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.2% annually for the foreseeable future. It's pretty clear that Zeon's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Zeon's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.

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 Zeon analysts - going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Zeon you should be aware 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.