Ajinomoto Co., Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Shareholders of Ajinomoto Co., Inc. (TSE:2802) will be pleased this week, given that the stock price is up 16% to JP¥4,099 following its latest third-quarter results. The result was positive overall - although revenues of JP¥425b were in line with what the analysts predicted, Ajinomoto surprised by delivering a statutory profit of JP¥39.64 per share, modestly greater than expected. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Ajinomoto's 13 analysts are now forecasting revenues of JP¥1.66t in 2027. This would be a credible 7.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 74% to JP¥140. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.65t and earnings per share (EPS) of JP¥141 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.
Check out our latest analysis for Ajinomoto
It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥4,215. 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 Ajinomoto analyst has a price target of JP¥5,100 per share, while the most pessimistic values it at JP¥3,500. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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. We would highlight that Ajinomoto's revenue growth is expected to slow, with the forecast 6.1% annualised growth rate until the end of 2027 being well below the historical 8.2% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.3% 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 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. 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 forecasts for Ajinomoto going out to 2028, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for Ajinomoto that we have uncovered.
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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.