Dentsu Soken Inc. (TSE:4812) Just Released Its First-Quarter Earnings: Here's What Analysts Think

Shareholders might have noticed that Dentsu Soken Inc. (TSE:4812) filed its first-quarter result this time last week. The early response was not positive, with shares down 5.7% to JP¥5,740 in the past week. Revenues came in 2.8% below expectations, at JP¥40b. Statutory earnings per share were relatively better off, with a per-share profit of JP¥232 being roughly in line with analyst estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Our free stock report includes 1 warning sign investors should be aware of before investing in Dentsu Soken. Read for free now.

After the latest results, the three analysts covering Dentsu Soken are now predicting revenues of JP¥170.8b in 2025. If met, this would reflect a decent 9.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 11% to JP¥259. In the lead-up to this report, the analysts had been modelling revenues of JP¥169.0b and earnings per share (EPS) of JP¥259 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 Dentsu Soken

The analysts reconfirmed their price target of JP¥6,650, showing that the business is executing well and in line with expectations. 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. The most optimistic Dentsu Soken analyst has a price target of JP¥6,900 per share, while the most pessimistic values it at JP¥6,400. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Dentsu Soken's 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 8.9% 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 5.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Dentsu Soken to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at JP¥6,650, 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 Dentsu Soken 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 Dentsu Soken that you need to be mindful 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.