Results: United Arrows Ltd. Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a good week for United Arrows Ltd. (TSE:7606) shareholders, because the company has just released its latest first-quarter results, and the shares gained 4.5% to JP¥2,049. The result was positive overall - although revenues of JP¥35b were in line with what the analysts predicted, United Arrows surprised by delivering a statutory profit of JP¥63.90 per share, modestly greater than expected. 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.

View our latest analysis for United Arrows

Taking into account the latest results, the most recent consensus for United Arrows from seven analysts is for revenues of JP¥149.7b in 2025. If met, it would imply a notable 8.8% increase on its revenue over the past 12 months. Statutory earnings per share are expected to reduce 4.8% to JP¥167 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥149.2b and earnings per share (EPS) of JP¥162 in 2025. So the consensus seems to have become somewhat more optimistic on United Arrows' earnings potential following these results.

There's been no major changes to the consensus price target of JP¥2,236, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values United Arrows at JP¥2,600 per share, while the most bearish prices it at JP¥1,700. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await United Arrows shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the United Arrows' past performance and to peers in the same industry. One thing stands out from these estimates, which is that United Arrows is forecast to grow faster in the future than it has in the past, with revenues expected to display 12% annualised growth until the end of 2025. If achieved, this would be a much better result than the 3.6% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.9% per year. Not only are United Arrows' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards United Arrows following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at JP¥2,236, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for United Arrows going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for United Arrows that we have uncovered.

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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.