Investors in CUC Inc. (TSE:9158) had a good week, as its shares rose 4.3% to close at JP¥758 following the release of its half-year results. Statutory earnings per share fell badly short of expectations, coming in at JP¥6.15, some 36% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at JP¥29b. 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.
Taking into account the latest results, the most recent consensus for CUC from twin analysts is for revenues of JP¥60.4b in 2027. If met, it would imply a credible 6.4% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to plummet 49% to JP¥37.52 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥62.3b and earnings per share (EPS) of JP¥26.28 in 2027. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company’s cost base, given the massive increase in to the earnings per share numbers.
See our latest analysis for CUC
The consensus price target fell 11% to JP¥800, with the analysts signalling that the weaker revenue outlook was a more powerful indicator than the upgraded EPS forecasts.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CUC’s past performance and to peers in the same industry. It’s pretty clear that there is an expectation that CUC’s revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.8% per year. Even after the forecast slowdown in growth, it seems obvious that CUC is also expected to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around CUC’s earnings potential next year. They also downgraded CUC’s revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, long term profitability is more important for the value creation process. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have analyst estimates for CUC going out as far as 2029, and you can see them free on our platform here.
Even so, be aware that CUC is showing 2 warning signs in our investment analysis , and 1 of those doesn’t sit too well with us…
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