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Earnings Beat: Fuji Corporation (TSE:6134) Just Beat Analyst Forecasts, And Analysts Have Been Lifting Their Forecasts
Shareholders in Fuji Corporation (TSE:6134) had a terrible week, as shares crashed 22% to JP¥4,665 in the week since its latest interim results. Results overall were respectable, with statutory earnings of JP¥179 per share roughly in line with what the analysts had forecast. Revenues of JP¥128b came in 2.3% 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Fuji after the latest results.
Following the latest results, Fuji's five analysts are now forecasting revenues of JP¥260.8b in 2027. This would be a solid 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 52% to JP¥560. In the lead-up to this report, the analysts had been modelling revenues of JP¥240.5b and earnings per share (EPS) of JP¥473 in 2027. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a substantial gain in earnings per share in particular.
See our latest analysis for Fuji
Despite these upgrades,the analysts have not made any major changes to their price target of JP¥8,740, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Fuji, with the most bullish analyst valuing it at JP¥12,000 and the most bearish at JP¥2,700 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Fuji's rate of growth is expected to accelerate meaningfully, with the forecast 30% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 4.9% p.a. 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 6.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Fuji 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 Fuji's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Fuji going out to 2029, and you can see them free on our platform here.
You still need to take note of risks, for example - Fuji has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.
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