Rainbows and Unicorns: The Japan Electronic Materials Corporation (TSE:6855) Analyst Just Became A Lot More Optimistic

Celebrations may be in order for Japan Electronic Materials Corporation (TSE:6855) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance.

After this upgrade, Japan Electronic Materials' single analyst is now forecasting revenues of JP¥22b in 2025. This would be a sizeable 26% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 189% to JP¥143. Prior to this update, the analyst had been forecasting revenues of JP¥18b and earnings per share (EPS) of JP¥55.40 in 2025. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for Japan Electronic Materials

It will come as no surprise to learn that the analyst has increased their price target for Japan Electronic Materials 116% to JP¥4,100 on the back of these upgrades.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Japan Electronic Materials' rate of growth is expected to accelerate meaningfully, with the forecast 26% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 6.9% p.a. 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 13% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Japan Electronic Materials is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Japan Electronic Materials.

The covering analyst is definitely bullish on Japan Electronic Materials, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including its declining profit margins. You can learn more, and discover the 1 other risk we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.