J. Front Retailing Co., Ltd. Just Beat EPS By 11%: Here's What Analysts Think Will Happen Next

Investors in J. Front Retailing Co., Ltd. (TSE:3086) had a good week, as its shares rose 3.0% to close at JP¥1,739 following the release of its full-year results. It looks like a credible result overall - although revenues of JP¥442b were in line with what the analysts predicted, J. Front Retailing surprised by delivering a statutory profit of JP¥160 per share, a notable 11% above expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on J. Front Retailing after the latest results.

We've discovered 2 warning signs about J. Front Retailing. View them for free.

Following last week's earnings report, J. Front Retailing's five analysts are forecasting 2026 revenues to be JP¥446.1b, approximately in line with the last 12 months. Statutory earnings per share are expected to drop 19% to JP¥131 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥443.3b and earnings per share (EPS) of JP¥133 in 2026. 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.

View our latest analysis for J. Front Retailing

The analysts reconfirmed their price target of JP¥2,046, showing that the business is executing well and in line with expectations. 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. Currently, the most bullish analyst values J. Front Retailing at JP¥2,450 per share, while the most bearish prices it at JP¥1,850. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that J. Front Retailing's revenue growth is expected to slow, with the forecast 1.0% annualised growth rate until the end of 2026 being well below the historical 2.1% 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 5.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that J. Front Retailing is also expected to grow slower than other industry participants.

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. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for J. Front Retailing going out to 2028, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for J. Front Retailing (1 is a bit concerning!) that you need to be mindful of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.