Shareholders might have noticed that Olympus Corporation (TSE:7733) filed its interim result this time last week. The early response was not positive, with shares down 3.0% to JP¥1,791 in the past week. It looks like a credible result overall - although revenues of JP¥510b were what the analysts expected, Olympus surprised by delivering a (statutory) profit of JP¥31.02 per share, an impressive 29% above what was forecast. 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.
Taking into account the latest results, Olympus' twelve analysts currently expect revenues in 2027 to be JP¥1.08t, approximately in line with the last 12 months. Statutory earnings per share are predicted to expand 18% to JP¥101. In the lead-up to this report, the analysts had been modelling revenues of JP¥1.08t and earnings per share (EPS) of JP¥98.05 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
Check out our latest analysis for Olympus
There's been no major changes to the consensus price target of JP¥2,085, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Olympus, with the most bullish analyst valuing it at JP¥3,300 and the most bearish at JP¥1,800 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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 Olympus' revenue growth is expected to slow, with the forecast 3.0% annualised growth rate until the end of 2027 being well below the historical 4.8% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.7% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Olympus.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Olympus' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than 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. We have estimates - from multiple Olympus analysts - going out to 2029, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Olympus that you need to take into consideration.
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