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

Adastria Co., Ltd. (TSE:2685) shareholders are probably feeling a little disappointed, since its shares fell 3.7% to JP¥2,739 in the week after its latest annual results. Revenues were in line with forecasts, at JP¥293b, although statutory earnings per share came in 19% below what the analysts expected, at JP¥209 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the consensus forecast from Adastria's six analysts is for revenues of JP¥304.3b in 2026. This reflects a credible 3.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 25% to JP¥260. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥309.3b and earnings per share (EPS) of JP¥284 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

Check out our latest analysis for Adastria

It might be a surprise to learn that the consensus price target fell 5.4% to JP¥3,660, with the analysts clearly linking lower forecast earnings to the performance of the stock price. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Adastria analyst has a price target of JP¥4,000 per share, while the most pessimistic values it at JP¥3,160. This is a very narrow spread of estimates, implying either that Adastria is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. We would highlight that Adastria's revenue growth is expected to slow, with the forecast 3.8% annualised growth rate until the end of 2026 being well below the historical 9.7% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.0% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Adastria.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Adastria's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Adastria's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Adastria 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 2 warning signs for Adastria 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.