Revenue Beat: Yamato Kogyo Co., Ltd. Exceeded Revenue Forecasts By 5.4% And Analysts Are Updating Their Estimates

The third-quarter results for Yamato Kogyo Co., Ltd. (TSE:5444) were released last week, making it a good time to revisit its performance. Results overall were respectable, with statutory earnings of JP¥1,099 per share roughly in line with what the analysts had forecast. Revenues of JP¥48b came in 5.4% ahead of analyst predictions. 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 Yamato Kogyo

Taking into account the latest results, the most recent consensus for Yamato Kogyo from three analysts is for revenues of JP¥178.5b in 2026. If met, it would imply an okay 6.5% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 43% to JP¥843. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥184.1b and earnings per share (EPS) of JP¥856 in 2026. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The consensus has reconfirmed its price target of JP¥8,650, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Yamato Kogyo's market value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Yamato Kogyo analyst has a price target of JP¥9,300 per share, while the most pessimistic values it at JP¥7,500. This is a very narrow spread of estimates, implying either that Yamato Kogyo is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. It's clear from the latest estimates that Yamato Kogyo's rate of growth is expected to accelerate meaningfully, with the forecast 5.2% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 0.6% p.a. 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 1.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Yamato Kogyo is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also downgraded Yamato Kogyo's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Still, earnings are more important to the intrinsic value of the business. 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.

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 forecasts for Yamato Kogyo going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Yamato Kogyo that you need to take into consideration.

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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.