Results: West Japan Railway Company Beat Earnings Expectations And Analysts Now Have New Forecasts
Last week, you might have seen that West Japan Railway Company (TSE:9021) released its quarterly result to the market. The early response was not positive, with shares down 2.5% to JP¥2,926 in the past week. Revenues were JP¥424b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of JP¥85.80 were also better than expected, beating analyst predictions by 14%. 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.
Following last week's earnings report, West Japan Railway's eleven analysts are forecasting 2027 revenues to be JP¥1.84t, approximately in line with the last 12 months. Statutory earnings per share are expected to descend 12% to JP¥228 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.84t and earnings per share (EPS) of JP¥226 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.
View our latest analysis for West Japan Railway
The analysts reconfirmed their price target of JP¥3,069, showing that the business is executing well and in line with expectations. 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. Currently, the most bullish analyst values West Japan Railway at JP¥3,500 per share, while the most bearish prices it at JP¥2,760. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.07% by the end of 2027. This indicates a significant reduction from annual growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - West Japan Railway is expected to lag the wider industry.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that West Japan Railway's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for West Japan Railway going out to 2029, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with West Japan Railway (including 1 which is a bit concerning) .
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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.