Kyoei Steel Ltd. (TSE:5440) Just Released Its Yearly Earnings: Here's What Analysts Think

It's been a sad week for Kyoei Steel Ltd. (TSE:5440), who've watched their investment drop 16% to JP¥2,136 in the week since the company reported its annual result. Kyoei Steel missed revenue estimates by 2.3%, coming in atJP¥321b, although statutory earnings per share (EPS) of JP¥318 beat expectations, coming in 2.9% ahead of analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Kyoei Steel

Taking into account the latest results, the consensus forecast from Kyoei Steel's four analysts is for revenues of JP¥337.1b in 2025. This reflects a credible 5.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dip 4.9% to JP¥303 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥338.6b and earnings per share (EPS) of JP¥305 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥2,253. 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 Kyoei Steel at JP¥2,440 per share, while the most bearish prices it at JP¥2,100. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Kyoei Steel is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kyoei Steel's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Kyoei Steel's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.0% growth on an annualised basis. This is compared to a historical growth rate of 9.0% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.5% per year. So it's pretty clear that, while Kyoei Steel's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at JP¥2,253, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Kyoei Steel analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Kyoei Steel (1 shouldn't be ignored!) that we have uncovered.

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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.