Imperial Hotel, Ltd. Just Beat EPS By 15%: Here's What Analysts Think Will Happen Next
Last week saw the newest first-quarter earnings release from Imperial Hotel, Ltd. (TSE:9708), an important milestone in the company's journey to build a stronger business. Revenues were JP¥15b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of JP¥2.42 were also better than expected, beating analyst predictions by 15%. Following the result, the analyst has 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Imperial Hotel after the latest results.
After the latest results, the sole analyst covering Imperial Hotel are now predicting revenues of JP¥61.6b in 2027. If met, this would reflect a credible 7.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to crater 41% to JP¥18.60 in the same period. Before this earnings report, the analyst had been forecasting revenues of JP¥61.4b and earnings per share (EPS) of JP¥15.20 in 2027. Although the revenue estimates have not really changed, we can see there's been a considerable lift to earnings per share expectations, suggesting that the analyst has become more bullish after the latest result.
Check out our latest analysis for Imperial Hotel
The consensus price target fell 12% to JP¥1,140, suggesting the increase in earnings forecasts was not enough to offset other the analyst concerns.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Imperial Hotel's revenue growth is expected to slow, with the forecast 9.6% annualised growth rate until the end of 2027 being well below the historical 15% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.1% annually. Factoring in the forecast slowdown in growth, it looks like Imperial Hotel is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing here is that the analyst upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Imperial Hotel following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Imperial Hotel. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Imperial Hotel going out as far as 2029, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.