Results: Maruwa Co.,Ltd. Beat Earnings Expectations And Analysts Now Have New Forecasts

Maruwa Co.,Ltd. (TSE:5344) just released its latest quarterly results and things are looking bullish. The company beat forecasts, with revenue of JP¥16b, some 7.4% above estimates, and statutory earnings per share (EPS) coming in at JP¥365, 29% ahead of expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on MaruwaLtd after the latest results.

View our latest analysis for MaruwaLtd

Taking into account the latest results, the most recent consensus for MaruwaLtd from five analysts is for revenues of JP¥72.7b in 2025. If met, it would imply a meaningful 12% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 13% to JP¥1,550. In the lead-up to this report, the analysts had been modelling revenues of JP¥72.4b and earnings per share (EPS) of JP¥1,467 in 2025. So the consensus seems to have become somewhat more optimistic on MaruwaLtd's earnings potential following these results.

There's been no major changes to the consensus price target of JP¥41,458, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values MaruwaLtd at JP¥53,000 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.

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. The analysts are definitely expecting MaruwaLtd's growth to accelerate, with the forecast 16% annualised growth to the end of 2025 ranking favourably alongside historical growth of 10% per annum 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 7.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect MaruwaLtd to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards MaruwaLtd following these results. 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.

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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com