Otsuka Corporation Just Missed EPS By 9.4%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Otsuka Corporation (TSE:4768) released its first-quarter result to the market. The early response was not positive, with shares down 8.7% to JP¥2,866 in the past week. It looks like the results were a bit of a negative overall. While revenues of JP¥316b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 9.4% to hit JP¥38.22 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Our free stock report includes 2 warning signs investors should be aware of before investing in Otsuka. Read for free now.

Taking into account the latest results, the current consensus from Otsuka's eleven analysts is for revenues of JP¥1.25t in 2025. This would reflect a satisfactory 8.0% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 7.4% to JP¥159. Before this earnings report, the analysts had been forecasting revenues of JP¥1.25t and earnings per share (EPS) of JP¥159 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

Check out our latest analysis for Otsuka

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥3,783. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Otsuka at JP¥4,400 per share, while the most bearish prices it at JP¥3,100. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Otsuka's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 5.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Otsuka is expected to grow much faster than its industry.

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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Otsuka. Long-term earnings power is much more important than next year's profits. We have forecasts for Otsuka going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Otsuka has 2 warning signs (and 1 which is significant) we think 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.