Forecast: Analysts Think Seibu Holdings Inc.'s (TSE:9024) Business Prospects Have Improved Drastically

Shareholders in Seibu Holdings Inc. (TSE:9024) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investors have been pretty optimistic on Seibu Holdings too, with the stock up 11% to JP¥2,380 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 most recent consensus for Seibu Holdings from its four analysts is for revenues of JP¥580b in 2025 which, if met, would be a sizeable 21% increase on its sales over the past 12 months. Per-share earnings are expected to jump 81% to JP¥162. Previously, the analysts had been modelling revenues of JP¥490b and earnings per share (EPS) of JP¥116 in 2025. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Seibu Holdings

Despite these upgrades, the analysts have not made any major changes to their price target of JP¥2,265, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Seibu Holdings' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Seibu Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 21% annualised growth until the end of 2025. If achieved, this would be a much better result than the 5.3% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.1% annually. Not only are Seibu Holdings' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Seibu Holdings could be a good candidate for more research.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential flag with Seibu Holdings, including its declining profit margins. For more information, you can click through to our platform to learn more about this and the 1 other flag we've identified .

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.