A week ago, Keyence Corporation (TSE:6861) came out with a strong set of half-year numbers that could potentially lead to a re-rate of the stock. Results were good overall, with revenues beating analyst predictions by 7.0% to hit JP¥389b. Statutory earnings per share (EPS) came in at JP¥658, some 3.5% above whatthe analysts had 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Keyence's 16 analysts is for revenues of JP¥1.48t in 2027. This would reflect a solid 8.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 7.9% to JP¥2,420. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.45t and earnings per share (EPS) of JP¥2,337 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
See our latest analysis for Keyence
The consensus price target was unchanged at JP¥99,000, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Keyence analyst has a price target of JP¥120,000 per share, while the most pessimistic values it at JP¥81,200. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Keyence's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 11% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Keyence to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Keyence following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at JP¥99,000, 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 Keyence. Long-term earnings power is much more important than next year's profits. We have forecasts for Keyence going out to 2029, and you can see them free on our platform here.
We also provide an overview of the Keyence Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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