Maruwa Co.,Ltd. Just Beat Revenue Estimates By 8.1%

Investors in Maruwa Co.,Ltd. (TSE:5344) had a good week, as its shares rose 8.3% to close at JP¥42,990 following the release of its half-year results. Results overall were respectable, with statutory earnings of JP¥319 per share roughly in line with what the analysts had forecast. Revenues of JP¥35b came in 8.1% ahead of analyst predictions. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for MaruwaLtd

After the latest results, the five analysts covering MaruwaLtd are now predicting revenues of JP¥72.6b 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 accumulate 8.2% to JP¥1,480. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥72.6b and earnings per share (EPS) of JP¥1,530 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥42,792, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values MaruwaLtd at JP¥54,000 per share, while the most bearish prices it at JP¥26,000. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the MaruwaLtd's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of MaruwaLtd'shistorical trends, as the 13% annualised revenue growth to the end of 2025 is roughly in line with the 11% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.3% annually. So it's pretty clear that MaruwaLtd is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for MaruwaLtd. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for MaruwaLtd 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 MaruwaLtd 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.