LY Corporation Just Missed Earnings - But Analysts Have Updated Their Models

It's been a good week for LY Corporation (TSE:4689) shareholders, because the company has just released its latest half-year results, and the shares gained 8.0% to JP¥541. It looks like a pretty bad result, all things considered. Although revenues of JP¥564b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 26% to hit JP¥5.07 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the current consensus from LY's 14 analysts is for revenues of JP¥2.30t in 2027. This would reflect an okay 6.5% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 37% to JP¥29.66. In the lead-up to this report, the analysts had been modelling revenues of JP¥2.30t and earnings per share (EPS) of JP¥29.66 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

See our latest analysis for LY

The analysts reconfirmed their price target of JP¥602, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values LY at JP¥750 per share, while the most bearish prices it at JP¥470. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that LY's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 7.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.8% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect LY to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at JP¥602, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for LY going out to 2029, and you can see them free on our platform here..

You still need to take note of risks, for example - LY has 2 warning signs we think you should be aware of.

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