Keyence Corporation Just Beat EPS By 24%: Here's What Analysts Think Will Happen Next

As you might know, Keyence Corporation (TSE:6861) just kicked off its latest first-quarter results with some very strong numbers. Keyence delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting JP¥347b-11% above indicated-andJP¥574-24% above forecasts- respectively 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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After the latest results, the 16 analysts covering Keyence are now predicting revenues of JP¥1.41t in 2027. If met, this would reflect a solid 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 10% to JP¥2,239. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.35t and earnings per share (EPS) of JP¥2,123 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

View our latest analysis for Keyence

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of JP¥92,250, suggesting that the forecast performance does not have a long term impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Keyence at JP¥115,000 per share, while the most bearish prices it at JP¥69,000. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Keyence's growth to accelerate, with the forecast 17% annualised growth to the end of 2027 ranking favourably alongside historical growth of 11% 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 9.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Keyence to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Keyence's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at JP¥92,250, 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 Keyence going out to 2029, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Keyence that you should be aware 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.