McDonald's Holdings Company (Japan), Ltd. (TSE:2702) Released Earnings Last Week And Analysts Lifted Their Price Target To JP¥9,200
It's been a pretty great week for McDonald's Holdings Company (Japan), Ltd. (TSE:2702) shareholders, with its shares surging 10% to JP¥9,594 in the week since its latest quarterly results. McDonald's Holdings Company (Japan) reported in line with analyst predictions, delivering revenues of JP¥106b and statutory earnings per share of JP¥255, suggesting the business is executing well and in line with its plan. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following last week's earnings report, McDonald's Holdings Company (Japan)'s three analysts are forecasting 2027 revenues to be JP¥414.7b, approximately in line with the last 12 months. Statutory earnings per share are predicted to rise 3.1% to JP¥289. In the lead-up to this report, the analysts had been modelling revenues of JP¥413.8b and earnings per share (EPS) of JP¥289 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 McDonald's Holdings Company (Japan)
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.9% to JP¥9,200. It looks as though they previously had some doubts over whether the business would live up to their expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on McDonald's Holdings Company (Japan), with the most bullish analyst valuing it at JP¥9,500 and the most bearish at JP¥8,900 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting McDonald's Holdings Company (Japan) is an easy business to forecast or the the analysts are all using similar assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that McDonald's Holdings Company (Japan)'s revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 0.09% growth on an annualised basis. This is compared to a historical growth rate of 5.9% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that McDonald's Holdings Company (Japan) is also expected to grow slower than other industry participants.
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 McDonald's Holdings Company (Japan)'s revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple McDonald's Holdings Company (Japan) analysts - going out to 2028, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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