News Flash: 5 Analysts Think Hakuhodo DY Holdings Inc (TSE:2433) Earnings Are Under Threat

One thing we could say about the analysts on Hakuhodo DY Holdings Inc (TSE:2433) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

After the downgrade, the five analysts covering Hakuhodo DY Holdings are now predicting revenues of JP¥983b in 2025. If met, this would reflect a satisfactory 3.8% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to crater 21% to JP¥53.47 in the same period. Before this latest update, the analysts had been forecasting revenues of JP¥1.3t and earnings per share (EPS) of JP¥68.35 in 2025. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Hakuhodo DY Holdings

Analysts made no major changes to their price target of JP¥1,270, suggesting the downgrades are not expected to have a long-term impact on Hakuhodo DY Holdings' valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that Hakuhodo DY Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 3.8% annualised growth until the end of 2025. If achieved, this would be a much better result than the 11% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.3% annually. So it looks like Hakuhodo DY Holdings is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Hakuhodo DY Holdings after the downgrade.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Hakuhodo DY Holdings' business, like the risk of cutting its dividend. For more information, you can click here to discover this and the 2 other flags we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.