The quarterly results for Kao Corporation (TSE:4452) were released last week, making it a good time to revisit its performance. The result was positive overall – although revenues of JP¥447b were in line with what the analysts predicted, Kao surprised by delivering a statutory profit of JP¥43.54 per share, modestly greater than expected. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the 14 analysts covering Kao are now predicting revenues of JP¥1.87t in 2027. If met, this would reflect a reasonable 5.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 7.8% to JP¥167. Before this earnings report, the analysts had been forecasting revenues of JP¥1.87t and earnings per share (EPS) of JP¥167 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.
View our latest analysis for Kao
There were no changes to revenue or earnings estimates or the price target of JP¥4,141, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Kao at JP¥4,450 per share, while the most bearish prices it at JP¥3,700. This is a very narrow spread of estimates, implying either that Kao is an easy company to value, or – more likely – the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kao’s past performance and to peers in the same industry. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 4.2% growth on an annualised basis. That is in line with its 4.1% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 3.9% per year. It’s clear that while Kao’s revenue growth is expected to continue on its current trajectory, it’s only expected to grow in line with the industry itself.
The Bottom Line
The most obvious conclusion is that there’s been no major change in the business’ prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Kao going out to 2028, and you can see them free on our platform here..
We also provide an overview of the Kao Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
Valuation is complex, but we’re here to simplify it.
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