Dowa Holdings Co., Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's been a pretty great week for Dowa Holdings Co., Ltd. (TSE:5714) shareholders, with its shares surging 10% to JP¥6,041 in the week since its latest interim results. It was not a great result overall. While revenues of JP¥317b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 13% to hit JP¥121 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the current consensus from Dowa Holdings' seven analysts is for revenues of JP¥671.4b in 2026. This would reflect a modest 4.4% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 44% to JP¥488. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥681.2b and earnings per share (EPS) of JP¥434 in 2026. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the decent improvement in earnings per share expectations following these results.

Check out our latest analysis for Dowa Holdings

The consensus price target was unchanged at JP¥5,211, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Dowa Holdings at JP¥6,600 per share, while the most bearish prices it at JP¥4,180. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Dowa Holdings' past performance and to peers in the same industry. It's clear from the latest estimates that Dowa Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 8.9% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 1.1% 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 2.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Dowa Holdings 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 Dowa Holdings' earnings potential next year. 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. 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 Dowa Holdings analysts - going out to 2028, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Dowa Holdings you should know about.

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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.