Investors in SECOM CO., LTD. (TSE:9735) had a good week, as its shares rose 6.7% to close at JP¥7,117 following the release of its half-yearly results. It was a credible result overall, with revenues of JP¥324b and statutory earnings per share of JP¥276 both in line with analyst estimates, showing that SECOM is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, SECOM's five analysts are now forecasting revenues of JP¥1.32t in 2027. This would be a satisfactory 2.3% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be JP¥299, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of JP¥1.31t and earnings per share (EPS) of JP¥294 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 SECOM
There's been no major changes to the consensus price target of JP¥7,110, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 SECOM at JP¥7,450 per share, while the most bearish prices it at JP¥6,800. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting SECOM is an easy business to forecast or the the analysts are all using similar assumptions.
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 can infer from the latest estimates that forecasts expect a continuation of SECOM'shistorical trends, as the 4.7% annualised revenue growth to the end of 2027 is roughly in line with the 4.4% 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 4.6% per year. It's clear that while SECOM'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 important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards SECOM following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at JP¥7,110, with the latest estimates not enough to have an impact on their price targets.
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 SECOM going out to 2029, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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