Menicon Co., Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
It's been a pretty great week for Menicon Co., Ltd. (TSE:7780) shareholders, with its shares surging 17% to JP¥2,023 in the week since its latest first-quarter results. Revenues were JP¥32b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at JP¥30.05, an impressive 89% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, Menicon's six analysts are now forecasting revenues of JP¥132.4b in 2027. This would be an okay 3.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dip 8.5% to JP¥88.15 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥132.3b and earnings per share (EPS) of JP¥89.72 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 Menicon
The analysts reconfirmed their price target of JP¥2,100, showing that the business is executing well and in line with expectations. 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. Currently, the most bullish analyst values Menicon at JP¥2,200 per share, while the most bearish prices it at JP¥2,000. This is a very narrow spread of estimates, implying either that Menicon is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 4.9% growth on an annualised basis. That is in line with its 6.0% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 6.4% annually. So it's pretty clear that Menicon is expected to grow slower than similar companies in the same 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, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Menicon's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥2,100, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Menicon going out to 2029, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Menicon 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.