Earnings Miss: Ajinomoto Co., Inc. Missed EPS By 28% And Analysts Are Revising Their Forecasts

It's been a good week for Ajinomoto Co., Inc. (TSE:2802) shareholders, because the company has just released its latest yearly results, and the shares gained 7.8% to JP¥3,238. Statutory earnings per share fell badly short of expectations, coming in at JP¥69.77, some 28% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at JP¥1.5t. 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.

We check all companies for important risks. See what we found for Ajinomoto in our free report.

After the latest results, the twelve analysts covering Ajinomoto are now predicting revenues of JP¥1.63t in 2026. If met, this would reflect an okay 6.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 76% to JP¥125. Before this earnings report, the analysts had been forecasting revenues of JP¥1.62t and earnings per share (EPS) of JP¥120 in 2026. So the consensus seems to have become somewhat more optimistic on Ajinomoto's earnings potential following these results.

Check out our latest analysis for Ajinomoto

There's been no major changes to the consensus price target of JP¥3,601, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. There are some variant perceptions on Ajinomoto, with the most bullish analyst valuing it at JP¥4,600 and the most bearish at JP¥3,000 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. It's pretty clear that there is an expectation that Ajinomoto's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 6.5% growth on an annualised basis. This is compared to a historical growth rate of 8.4% 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 3.2% annually. Even after the forecast slowdown in growth, it seems obvious that Ajinomoto is also expected to grow faster than 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 Ajinomoto following these results. 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. 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 in mind, we wouldn't be too quick to come to a conclusion on Ajinomoto. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Ajinomoto analysts - going out to 2028, and you can see them free on our platform here.

It might also be worth considering whether Ajinomoto's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.