Earnings Beat: SHIMAMURA Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for SHIMAMURA Co., Ltd. (TSE:8227) shareholders, because the company has just released its latest half-yearly results, and the shares gained 4.7% to JP¥8,273. Revenues were JP¥331b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of JP¥159 were also better than expected, beating analyst predictions by 12%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on SHIMAMURA after the latest results.

See our latest analysis for SHIMAMURA

Following last week's earnings report, SHIMAMURA's eleven analysts are forecasting 2025 revenues to be JP¥660.1b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be JP¥558, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥659.9b and earnings per share (EPS) of JP¥555 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of JP¥8,378, showing that the business is executing well and in line with expectations. 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 SHIMAMURA at JP¥10,000 per share, while the most bearish prices it at JP¥7,600. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 pretty clear that there is an expectation that SHIMAMURA's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.1% growth on an annualised basis. This is compared to a historical growth rate of 5.1% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.9% per year. Factoring in the forecast slowdown in growth, it seems obvious that SHIMAMURA 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. The consensus price target held steady at JP¥8,378, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for SHIMAMURA 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 SHIMAMURA that we have uncovered.

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.