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Eisai Co., Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Last week, you might have seen that Eisai Co., Ltd. (TSE:4523) released its interim result to the market. The early response was not positive, with shares down 2.1% to JP¥5,170 in the past week. It was not a great result overall. Although revenues beat expectations, hitting JP¥470b, statutory earnings missed analyst forecasts by 12%, coming in at just JP¥106 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the most recent consensus for Eisai from 14 analysts is for revenues of JP¥916.3b in 2027. If met, it would imply a credible 2.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 30% to JP¥203. Before this earnings report, the analysts had been forecasting revenues of JP¥914.3b and earnings per share (EPS) of JP¥204 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.
Check out our latest analysis for Eisai
It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥4,625. 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. The most optimistic Eisai analyst has a price target of JP¥5,600 per share, while the most pessimistic values it at JP¥3,200. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. It's clear from the latest estimates that Eisai's rate of growth is expected to accelerate meaningfully, with the forecast 4.7% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 3.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.5% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Eisai 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¥4,625, with the latest estimates not enough to have an impact on their price targets.
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 Eisai going out to 2029, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Eisai that you need to be mindful of.
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