Japan Electronic Materials Corporation (TSE:6855) Just Reported, And Analysts Assigned A JP¥5,200 Price Target

Japan Electronic Materials Corporation (TSE:6855) shareholders are probably feeling a little disappointed, since its shares fell 9.3% to JP¥2,121 in the week after its latest half-yearly results. Japan Electronic Materials reported in line with analyst predictions, delivering revenues of JP¥9.8b and statutory earnings per share of JP¥49.32, suggesting the business is executing well and in line with its plan. The analyst 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 analyst has changed their mind on Japan Electronic Materials after the latest results.

Check out our latest analysis for Japan Electronic Materials

After the latest results, the single analyst covering Japan Electronic Materials are now predicting revenues of JP¥20.5b in 2025. If met, this would reflect a reasonable 6.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 43% to JP¥214. Yet prior to the latest earnings, the analyst had been anticipated revenues of JP¥21.0b and earnings per share (EPS) of JP¥222 in 2025. The analyst are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

The consensus price target fell 5.5% to JP¥5,200, with the weaker earnings outlook clearly leading valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Japan Electronic Materials' past performance and to peers in the same industry. It's clear from the latest estimates that Japan Electronic Materials' rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.1% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 11% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Japan Electronic Materials is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Japan Electronic Materials. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 analyst estimates for Japan Electronic Materials going out as far as 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Japan Electronic Materials (of which 1 doesn't sit too well with us!) you should know about.

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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.