NEC Corporation Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

NEC Corporation (TSE:6701) just released its latest quarterly results and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 12% higher than the analysts had forecast, at JP¥820b, while EPS were JP¥37.47 beating analyst models by 100%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, NEC's 13 analysts currently expect revenues in 2027 to be JP¥3.71t, approximately in line with the last 12 months. Statutory per-share earnings are expected to be JP¥224, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of JP¥3.68t and earnings per share (EPS) of JP¥217 in 2027. So the consensus seems to have become somewhat more optimistic on NEC's earnings potential following these results.

See our latest analysis for NEC

The consensus price target was unchanged at JP¥5,949, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on NEC, with the most bullish analyst valuing it at JP¥8,000 and the most bearish at JP¥5,000 per share. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the NEC's past performance and to peers in the same industry. We would highlight that NEC's revenue growth is expected to slow, with the forecast 0.9% annualised growth rate until the end of 2027 being well below the historical 3.7% 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 5.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that NEC is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around NEC's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that NEC's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥5,949, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple NEC analysts - going out to 2029, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for NEC that you need to be mindful 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.