Ryohin Keikaku Co., Ltd. Just Recorded A 11% EPS Beat: Here's What Analysts Are Forecasting Next
Investors in Ryohin Keikaku Co., Ltd. (TSE:7453) had a good week, as its shares rose 6.5% to close at JP¥4,709 following the release of its annual results. It looks like a credible result overall - although revenues of JP¥924b were in line with what the analysts predicted, Ryohin Keikaku surprised by delivering a statutory profit of JP¥144 per share, a notable 11% above expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ryohin Keikaku after the latest results.
Following the latest results, Ryohin Keikaku's 16 analysts are now forecasting revenues of JP¥1.02t in 2027. This would be a solid 10% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be JP¥145, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of JP¥1.00t and earnings per share (EPS) of JP¥144 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 Ryohin Keikaku
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 5.9% to JP¥5,036. It looks as though they previously had some doubts over whether the business would live up to their expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Ryohin Keikaku analyst has a price target of JP¥5,800 per share, while the most pessimistic values it at JP¥3,600. 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 pretty clear that there is an expectation that Ryohin Keikaku's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 10% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.5% per year. Even after the forecast slowdown in growth, it seems obvious that Ryohin Keikaku is also expected 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 forecasts for Ryohin Keikaku going out to 2029, and you can see them free on our platform here.
We also provide an overview of the Ryohin Keikaku Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.