Kansai Paint Co., Ltd. (TSE:4613) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Explore Kansai Paint's Fair Values from the Community and select yours

Investors in Kansai Paint Co., Ltd. (TSE:4613) had a good week, as its shares rose 2.6% to close at JP¥2,220 following the release of its first-quarter results. Results were roughly in line with estimates, with revenues of JP¥145b and statutory earnings per share of JP¥202. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, Kansai Paint's eight analysts currently expect revenues in 2026 to be JP¥594.0b, approximately in line with the last 12 months. Statutory earnings per share are forecast to dip 6.1% to JP¥186 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥595.8b and earnings per share (EPS) of JP¥182 in 2026. So the consensus seems to have become somewhat more optimistic on Kansai Paint's earnings potential following these results.

Check out our latest analysis for Kansai Paint

There's been no major changes to the consensus price target of JP¥2,545, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock'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. There are some variant perceptions on Kansai Paint, with the most bullish analyst valuing it at JP¥2,900 and the most bearish at JP¥2,150 per share. This is a very narrow spread of estimates, implying either that Kansai Paint is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. We would highlight that Kansai Paint's revenue growth is expected to slow, with the forecast 1.3% annualised growth rate until the end of 2026 being well below the historical 11% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.2% annually. Factoring in the forecast slowdown in growth, it seems obvious that Kansai Paint is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Kansai Paint's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Kansai Paint's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥2,545, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Kansai Paint. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Kansai Paint analysts - going out to 2028, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Kansai Paint that you need to take into consideration.

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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.