J. Front Retailing Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Shareholders might have noticed that J. Front Retailing Co., Ltd. (TSE:3086) filed its interim result this time last week. The early response was not positive, with shares down 5.6% to JP¥2,355 in the past week. Revenues were JP¥109b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at JP¥31.55, an impressive 21% ahead of estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following last week's earnings report, J. Front Retailing's five analysts are forecasting 2026 revenues to be JP¥449.0b, approximately in line with the last 12 months. Statutory earnings per share are expected to decrease 3.7% to JP¥119 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥451.1b and earnings per share (EPS) of JP¥122 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

Check out our latest analysis for J. Front Retailing

The consensus price target held steady at JP¥2,114, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 J. Front Retailing analyst has a price target of JP¥2,450 per share, while the most pessimistic values it at JP¥1,900. This is a very narrow spread of estimates, implying either that J. Front Retailing is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the J. Front Retailing's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.5% by the end of 2026. This indicates a significant reduction from annual growth of 6.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.5% annually for the foreseeable future. It's pretty clear that J. Front Retailing's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for J. Front Retailing. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that J. Front Retailing's revenue is expected to 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.

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 J. Front Retailing going out to 2028, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for J. Front Retailing 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.