Stock Analysis

Earnings Miss: Kyowa Kirin Co., Ltd. Missed EPS By 5.6% And Analysts Are Revising Their Forecasts

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The first-quarter results for Kyowa Kirin Co., Ltd. (TSE:4151) were released last week, making it a good time to revisit its performance. It looks like the results were a bit of a negative overall. While revenues of JP¥106b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.6% to hit JP¥27.26 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Kyowa Kirin

TSE:4151 Earnings and Revenue Growth May 9th 2024

After the latest results, the twelve analysts covering Kyowa Kirin are now predicting revenues of JP¥474.0b in 2024. If met, this would reflect a reasonable 4.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to descend 19% to JP¥126 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥472.1b and earnings per share (EPS) of JP¥126 in 2024. 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.

There were no changes to revenue or earnings estimates or the price target of JP¥3,054, suggesting that the company has met expectations in its recent result. 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. The most optimistic Kyowa Kirin analyst has a price target of JP¥3,800 per share, while the most pessimistic values it at JP¥2,500. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kyowa Kirin's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Kyowa Kirin'shistorical trends, as the 5.8% annualised revenue growth to the end of 2024 is roughly in line with the 7.0% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.5% per year. So although Kyowa Kirin is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider 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. Happily, there were no major changes to revenue forecasts, with the business still 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Kyowa Kirin going out to 2026, and you can see them free on our platform here..

We also provide an overview of the Kyowa Kirin Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

Valuation is complex, but we're helping make it simple.

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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.

About TSE:4151

Kyowa Kirin

Engages in the research, development, manufacturing, marketing, and import/export of pharmaceuticals for oncology, nephrology, central nervous system, and immunology therapeutic areas in Japan, the United States, rest of the Americas, Europe, Asia, and internationally.

Flawless balance sheet with solid track record and pays a dividend.