The NGK Corporation (TSE:5333) First-Quarter Results Are Out And Analysts Have Published New Forecasts
Shareholders might have noticed that NGK Corporation (TSE:5333) filed its quarterly result this time last week. The early response was not positive, with shares down 8.1% to JP¥5,594 in the past week. It was a workmanlike result, with revenues of JP¥184b coming in 4.9% ahead of expectations, and statutory earnings per share of JP¥206, in line with analyst appraisals. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from NGK's seven analysts is for revenues of JP¥721.4b in 2027. This reflects a reasonable 4.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 20% to JP¥304. In the lead-up to this report, the analysts had been modelling revenues of JP¥717.8b and earnings per share (EPS) of JP¥302 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 NGK
There were no changes to revenue or earnings estimates or the price target of JP¥6,940, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic NGK analyst has a price target of JP¥9,000 per share, while the most pessimistic values it at JP¥5,530. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 6.6% growth on an annualised basis. That is in line with its 6.3% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 6.3% per year. It's clear that while NGK's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
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. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at JP¥6,940, 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 NGK analysts - 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 2 warning signs for NGK that you need to be mindful of.
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