Shareholders might have noticed that H2O Retailing Corporation (TSE:8242) filed its first-quarter result this time last week. The early response was not positive, with shares down 2.5% to JP¥2,791 in the past week. Results look mixed - while revenue fell marginally short of analyst estimates at JP¥165b, statutory earnings were in line with expectations, at JP¥254 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the dual analysts covering H2O Retailing are now predicting revenues of JP¥698.5b in 2027. If met, this would reflect a modest 2.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to tumble 33% to JP¥214 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥721.0b and earnings per share (EPS) of JP¥212 in 2027. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
View our latest analysis for H2O Retailing
The consensus price target rose 5.6% to JP¥2,850, with the analysts apparently satisfied with the business performance despite lower revenue forecasts.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 3.4% growth on an annualised basis. That is in line with its 3.2% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.6% per year. So although H2O Retailing is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Yet - earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2029, which can be seen for free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for H2O Retailing that you should be aware of.
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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.