USS Co., Ltd. (TSE:4732) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates

USS Co., Ltd. (TSE:4732) shareholders are probably feeling a little disappointed, since its shares fell 4.4% to JP¥1,277 in the week after its latest first-quarter results. Results overall were respectable, with statutory earnings of JP¥68.28 per share roughly in line with what the analysts had forecast. Revenues of JP¥26b came in 2.2% ahead of analyst predictions. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for USS

After the latest results, the six analysts covering USS are now predicting revenues of JP¥104.2b in 2025. If met, this would reflect a satisfactory 4.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 8.0% to JP¥76.53. Before this earnings report, the analysts had been forecasting revenues of JP¥103.1b and earnings per share (EPS) of JP¥75.20 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.

There were no changes to revenue or earnings estimates or the price target of JP¥1,420, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on USS, with the most bullish analyst valuing it at JP¥1,500 and the most bearish at JP¥1,250 per share. This is a very narrow spread of estimates, implying either that USS is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that USS' rate of growth is expected to accelerate meaningfully, with the forecast 6.6% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 5.4% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 6.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that USS is expected to grow at about the same rate as the wider 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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 in mind, we wouldn't be too quick to come to a conclusion on USS. Long-term earnings power is much more important than next year's profits. We have forecasts for USS going out to 2027, and you can see them free on our platform here.

We also provide an overview of the USS Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.