Earnings Update: Here's Why Analysts Just Lifted Their Rorze Corporation (TSE:6323) Price Target To JP¥20,650

Rorze Corporation (TSE:6323) just released its full-year report and things are looking bullish. The company beat expectations with revenues of JP¥93b arriving 3.1% ahead of forecasts. Statutory earnings per share (EPS) were JP¥1,111, 4.3% ahead of 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Rorze

Taking into account the latest results, the most recent consensus for Rorze from five analysts is for revenues of JP¥106.0b in 2025. If met, it would imply a meaningful 14% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 4.6% to JP¥1,162. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥101.9b and earnings per share (EPS) of JP¥1,104 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

It will come as no surprise to learn that the analysts have increased their price target for Rorze 12% to JP¥20,650on the back of these upgrades. 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 Rorze, with the most bullish analyst valuing it at JP¥26,000 and the most bearish at JP¥16,000 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Rorze's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2025 being well below the historical 24% p.a. growth over the last five years. Compare this to the 59 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 13% per year. Factoring in the forecast slowdown in growth, it looks like Rorze is forecast to grow at about the same rate as 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 Rorze following these results. They also upgraded their revenue forecasts, although the latest estimates suggest that Rorze will grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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. At Simply Wall St, we have a full range of analyst estimates for Rorze going out to 2027, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Rorze that you need to be mindful of.

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.