Earnings Miss: JCR Pharmaceuticals Co., Ltd. Missed EPS By 90% And Analysts Are Revising Their Forecasts

JCR Pharmaceuticals Co., Ltd. (TSE:4552) missed earnings with its latest first-quarter results, disappointing overly-optimistic forecasters. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (JP¥8.1b) coming in 28% below what they had expected. Statutory earnings per share of JP¥1.61 fell 90% short. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for JCR Pharmaceuticals

Taking into account the latest results, the consensus forecast from JCR Pharmaceuticals' seven analysts is for revenues of JP¥41.5b in 2025. This reflects an okay 3.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 18% to JP¥38.69. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥41.5b and earnings per share (EPS) of JP¥38.22 in 2025. 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.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 5.9% to JP¥902. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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. Currently, the most bullish analyst values JCR Pharmaceuticals at JP¥2,000 per share, while the most bearish prices it at JP¥600. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that JCR Pharmaceuticals' revenue growth is expected to slow, with the forecast 4.3% annualised growth rate until the end of 2025 being well below the historical 12% p.a. growth over the last five years. Compare this to the 41 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.2% per year. So it's pretty clear that, while JCR Pharmaceuticals' revenue growth is expected to slow, it's expected to grow roughly in line with the 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 real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on JCR Pharmaceuticals. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple JCR Pharmaceuticals analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for JCR Pharmaceuticals 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.

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