EN
Nippon Paint Holdings Co., Ltd. Just Recorded A 33% EPS Beat: Here's What Analysts Are Forecasting Next
It's been a good week for Nippon Paint Holdings Co., Ltd. (TSE:4612) shareholders, because the company has just released its latest third-quarter results, and the shares gained 4.3% to JP¥1,444. Revenues were JP¥524b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at JP¥26.96, an impressive 33% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Nippon Paint Holdings from eleven analysts is for revenues of JP¥2.09t in 2027. If met, it would imply a satisfactory 4.1% increase on its revenue over the past 12 months. Statutory per share are forecast to be JP¥91.79, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥2.10t and earnings per share (EPS) of JP¥91.55 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
See our latest analysis for Nippon Paint Holdings
The analysts reconfirmed their price target of JP¥1,365, 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. The most optimistic Nippon Paint Holdings analyst has a price target of JP¥1,650 per share, while the most pessimistic values it at JP¥1,080. 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.
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. We would highlight that Nippon Paint Holdings' revenue growth is expected to slow, with the forecast 3.3% annualised growth rate until the end of 2027 being well below the historical 13% 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 5.4% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Nippon Paint Holdings.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at JP¥1,365, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Nippon Paint Holdings analysts - going out to 2028, 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 Nippon Paint Holdings that you need to be mindful of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.