The USS Co., Ltd. (TSE:4732) Interim Results Are Out And Analysts Have Published New Forecasts
It's been a good week for USS Co., Ltd. (TSE:4732) shareholders, because the company has just released its latest half-yearly results, and the shares gained 2.4% to JP¥1,869. It was a credible result overall, with revenues of JP¥63b and statutory earnings per share of JP¥88.78 both in line with analyst estimates, showing that USS is executing in line with expectations. 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. 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, USS' six analysts currently expect revenues in 2027 to be JP¥124.8b, approximately in line with the last 12 months. Statutory per share are forecast to be JP¥96.89, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of JP¥124.2b and earnings per share (EPS) of JP¥97.66 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
Check out our latest analysis for USS
The analysts reconfirmed their price target of JP¥2,147, 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. The most optimistic USS analyst has a price target of JP¥2,600 per share, while the most pessimistic values it at JP¥1,900. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the USS' past performance and to peers in the same industry. It's pretty clear that there is an expectation that USS' revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 3.4% growth on an annualised basis. This is compared to a historical growth rate of 8.3% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.8% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than USS.
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 USS' 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. At Simply Wall St, we have a full range of analyst estimates for USS going out to 2029, and you can see them free on our platform here..
You can also see our analysis of USS' Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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