One Analyst's Earnings Estimates For Nippon Kodoshi Corporation (TYO:3891) Are Surging Higher

Nippon Kodoshi Corporation (TYO:3891) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to next year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Investors have been pretty optimistic on Nippon Kodoshi too, with the stock up 24% to JP¥3,010 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the current consensus from Nippon Kodoshi's lone analyst is for revenues of JP¥16b in 2022 which - if met - would reflect a satisfactory 7.4% increase on its sales over the past 12 months. Per-share earnings are expected to jump 32% to JP¥186. Previously, the analyst had been modelling revenues of JP¥15b and earnings per share (EPS) of JP¥155 in 2022. 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 Nippon Kodoshi

It will come as no surprise to learn that the analyst has increased their price target for Nippon Kodoshi 39% to JP¥3,200 on the back of these upgrades.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Nippon Kodoshi's past performance and to peers in the same industry. It's clear from the latest estimates that Nippon Kodoshi's rate of growth is expected to accelerate meaningfully, with the forecast 7.4% revenue growth noticeably faster than its historical growth of 0.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.9% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Nippon Kodoshi is expected to grow at about the same rate as the wider 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 next year, expecting improving business conditions. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Nippon Kodoshi could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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