Kokusai Electric Corporation Just Missed EPS By 19%: Here's What Analysts Think Will Happen Next
Kokusai Electric Corporation (TSE:6525) shareholders are probably feeling a little disappointed, since its shares fell 4.0% to JP¥6,143 in the week after its latest interim results. It was not a great result overall. While revenues of JP¥164b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 19% to hit JP¥111 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Kokusai Electric's 13 analysts are now forecasting revenues of JP¥346.8b in 2027. This would be a major 23% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 47% to JP¥255. Before this earnings report, the analysts had been forecasting revenues of JP¥342.7b and earnings per share (EPS) of JP¥250 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 Kokusai Electric
With no major changes to earnings forecasts, the consensus price target fell 6.1% to JP¥10,323, suggesting that the analysts might have previously been hoping for an earnings upgrade. 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. There are some variant perceptions on Kokusai Electric, with the most bullish analyst valuing it at JP¥14,000 and the most bearish at JP¥3,900 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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 Kokusai Electric's rate of growth is expected to accelerate meaningfully, with the forecast 51% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 12% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Kokusai Electric is expected to grow much faster than its 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Kokusai Electric going out to 2029, and you can see them free on our platform here..
You still need to take note of risks, for example - Kokusai Electric has 1 warning sign we think you should be aware of.
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