Santen Pharmaceutical Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Last week, you might have seen that Santen Pharmaceutical Co., Ltd. (TSE:4536) released its third-quarter result to the market. The early response was not positive, with shares down 7.8% to JP¥1,445 in the past week. It looks like a credible result overall - although revenues of JP¥76b were what the analysts expected, Santen Pharmaceutical surprised by delivering a (statutory) profit of JP¥25.33 per share, an impressive 27% above what was forecast. 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.

See our latest analysis for Santen Pharmaceutical

Taking into account the latest results, Santen Pharmaceutical's nine analysts currently expect revenues in 2026 to be JP¥297.8b, approximately in line with the last 12 months. Statutory earnings per share are predicted to surge 32% to JP¥106. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥297.4b and earnings per share (EPS) of JP¥107 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥2,093. 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. There are some variant perceptions on Santen Pharmaceutical, with the most bullish analyst valuing it at JP¥2,600 and the most bearish at JP¥1,700 per share. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.1% by the end of 2026. This indicates a significant reduction from annual growth of 5.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.2% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Santen Pharmaceutical is expected to lag the wider industry.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Santen Pharmaceutical going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Santen Pharmaceutical that you should be aware of.

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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.