Komeri Co.,Ltd. (TSE:8218) Just Reported, And Analysts Assigned A JP¥3,600 Price Target

Last week, you might have seen that Komeri Co.,Ltd. (TSE:8218) released its interim result to the market. The early response was not positive, with shares down 8.2% to JP¥3,285 in the past week. Revenues came in 2.8% below expectations, at JP¥91b. Statutory earnings per share were relatively better off, with a per-share profit of JP¥286 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for KomeriLtd

Taking into account the latest results, KomeriLtd's three analysts currently expect revenues in 2025 to be JP¥378.6b, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 5.0% to JP¥311. Before this earnings report, the analysts had been forecasting revenues of JP¥379.0b and earnings per share (EPS) of JP¥320 in 2025. 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.

The average price target fell 6.5% to JP¥3,600, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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. Currently, the most bullish analyst values KomeriLtd at JP¥4,100 per share, while the most bearish prices it at JP¥2,900. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the KomeriLtd's past performance and to peers in the same industry. The analysts are definitely expecting KomeriLtd's growth to accelerate, with the forecast 1.8% annualised growth to the end of 2025 ranking favourably alongside historical growth of 1.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.9% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, KomeriLtd is expected to grow slower than the wider industry.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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 KomeriLtd's future valuation.

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 estimates - from multiple KomeriLtd analysts - going out to 2027, and you can see them free on our platform here.

You can also view our analysis of KomeriLtd's balance sheet, and whether we think KomeriLtd is carrying too much debt, for free on our platform 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.