YONEX Co., Ltd. (TSE:7906) Just Reported Earnings, And Analysts Cut Their Target Price
Shareholders might have noticed that YONEX Co., Ltd. (TSE:7906) filed its half-year result this time last week. The early response was not positive, with shares down 5.5% to JP¥2,436 in the past week. Results were roughly in line with estimates, with revenues of JP¥92b and statutory earnings per share of JP¥141. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from YONEX's four analysts is for revenues of JP¥182.2b in 2027. This reflects a credible 3.6% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be JP¥164, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of JP¥182.1b and earnings per share (EPS) of JP¥164 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 YONEX
With no major changes to earnings forecasts, the consensus price target fell 16% to JP¥3,800, suggesting that the analysts might have previously been hoping for an earnings upgrade. 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 YONEX analyst has a price target of JP¥3,900 per share, while the most pessimistic values it at JP¥3,700. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting YONEX is an easy business to forecast or the the analysts are all using similar assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that YONEX's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 7.3% growth on an annualised basis. This is compared to a historical growth rate of 18% 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) 4.7% per year. So it's pretty clear that, while YONEX's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of YONEX's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on YONEX. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for YONEX going out to 2029, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for YONEX that you need to take into consideration.
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