Last week, you might have seen that Sanrio Company, Ltd. (TSE:8136) released its half-year result to the market. The early response was not positive, with shares down 4.5% to JP¥1,170 in the past week. It was a workmanlike result, with revenues of JP¥56b coming in 3.0% ahead of expectations, and statutory earnings per share of JP¥45.33, in line with analyst appraisals. 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. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Sanrio Company’s 13 analysts is for revenues of JP¥236.6b in 2027. This reflects a decent 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 15% to JP¥53.17. In the lead-up to this report, the analysts had been modelling revenues of JP¥233.8b and earnings per share (EPS) of JP¥53.00 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.
View our latest analysis for Sanrio Company
It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥1,548. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. The most optimistic Sanrio Company analyst has a price target of JP¥1,850 per share, while the most pessimistic values it at JP¥1,260. 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.
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. We would highlight that Sanrio Company’s revenue growth is expected to slow, with the forecast 22% annualised growth rate until the end of 2027 being well below the historical 31% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.8% per year. So it’s pretty clear that, while Sanrio Company’s revenue growth is expected to slow, it’s still expected to grow faster than the industry itself.
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. The consensus price target held steady at JP¥1,548, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn’t be too quick to come to a conclusion on Sanrio Company. Long-term earnings power is much more important than next year’s profits. At Simply Wall St, we have a full range of analyst estimates for Sanrio Company going out to 2029, and you can see them free on our platform here..
Even so, be aware that Sanrio Company is showing 1 warning sign in our investment analysis , you should know about…
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