SHIMAMURA Co., Ltd. (TSE:8227) Yearly Results Just Came Out: Here's What Analysts Are Forecasting For This Year

It's been a sad week for SHIMAMURA Co., Ltd. (TSE:8227), who've watched their investment drop 10% to JP¥7,725 in the week since the company reported its annual result. It was a credible result overall, with revenues of JP¥635b and statutory earnings per share of JP¥545 both in line with analyst estimates, showing that SHIMAMURA is executing in line with expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 SHIMAMURA

Taking into account the latest results, the most recent consensus for SHIMAMURA from ten analysts is for revenues of JP¥654.2b in 2025. If met, it would imply a modest 3.0% increase on its revenue over the past 12 months. Statutory earnings per share are expected to shrink 3.3% to JP¥527 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥651.8b and earnings per share (EPS) of JP¥560 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 consensus price target held steady at JP¥8,147, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on SHIMAMURA, with the most bullish analyst valuing it at JP¥8,900 and the most bearish at JP¥7,200 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. 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 3.0% growth on an annualised basis. This is compared to a historical growth rate of 4.4% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.6% annually. 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 biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for SHIMAMURA. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that SHIMAMURA's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥8,147, 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.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for SHIMAMURA that you should be aware of.

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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.