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Japan Exchange Group, Inc. (TSE:8697) Analysts Are Pretty Bullish On The Stock After Recent Results
Japan Exchange Group, Inc. (TSE:8697) shareholders are probably feeling a little disappointed, since its shares fell 4.6% to JP¥2,117 in the week after its latest interim results. Results overall were respectable, with statutory earnings of JP¥76.81 per share roughly in line with what the analysts had forecast. Revenues of JP¥65b came in 3.3% ahead of analyst predictions. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Japan Exchange Group's five analysts is for revenues of JP¥257.4b in 2027. This would reflect a satisfactory 6.9% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 5.1% to JP¥105. Before this earnings report, the analysts had been forecasting revenues of JP¥249.7b and earnings per share (EPS) of JP¥97.17 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.
See our latest analysis for Japan Exchange Group
It will come as no surprise to learn that the analysts have increased their price target for Japan Exchange Group 11% to JP¥2,548on the back of these upgrades. 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 Japan Exchange Group at JP¥2,800 per share, while the most bearish prices it at JP¥2,000. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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 Japan Exchange Group's growth to accelerate, with the forecast 14% 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 3.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Japan Exchange Group is expected to grow much faster than its 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 Japan Exchange Group following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Japan Exchange Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Japan Exchange Group analysts - going out to 2029, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Japan Exchange Group .
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