The Dexerials Corporation (TSE:4980) Annual Results Are Out And Analysts Have Published New Forecasts
The investors in Dexerials Corporation's (TSE:4980) will be rubbing their hands together with glee today, after the share price leapt 42% to JP¥3,849 in the week following its annual results. Dexerials reported JP¥114b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of JP¥166 beat expectations, being 3.3% higher than what the analysts expected. 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 consensus forecast from Dexerials' four analysts is for revenues of JP¥123.5b in 2027. This reflects a notable 8.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 4.9% to JP¥176. Before this earnings report, the analysts had been forecasting revenues of JP¥120.4b and earnings per share (EPS) of JP¥166 in 2027. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
View our latest analysis for Dexerials
Despite these upgrades,the analysts have not made any major changes to their price target of JP¥2,970, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Dexerials analyst has a price target of JP¥3,400 per share, while the most pessimistic values it at JP¥2,500. 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 Dexerials' rate of growth is expected to accelerate meaningfully, with the forecast 8.5% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 7.0% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 7.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Dexerials is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Dexerials following these results. They also upgraded their revenue forecasts, although the latest estimates suggest that Dexerials will grow in line with the overall industry. The consensus price target held steady at JP¥2,970, 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 Dexerials 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 Dexerials that you need to be mindful of.
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