Earnings Miss: Nomura Real Estate Holdings, Inc. Missed EPS By 21% And Analysts Are Revising Their Forecasts

The analysts might have been a bit too bullish on Nomura Real Estate Holdings, Inc. (TSE:3231), given that the company fell short of expectations when it released its quarterly results last week. Unfortunately, Nomura Real Estate Holdings delivered a serious earnings miss. Revenues of JP¥191b were 18% below expectations, and statutory earnings per share of JP¥17.23 missed estimates by 21%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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After the latest results, the twelve analysts covering Nomura Real Estate Holdings are now predicting revenues of JP¥1.07t in 2027. If met, this would reflect a notable 18% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 16% to JP¥101. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.05t and earnings per share (EPS) of JP¥103 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

See our latest analysis for Nomura Real Estate Holdings

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥1,131, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Nomura Real Estate Holdings, with the most bullish analyst valuing it at JP¥1,250 and the most bearish at JP¥960 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Nomura Real Estate Holdings' growth to accelerate, with the forecast 24% annualised growth to the end of 2027 ranking favourably alongside historical growth of 7.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Nomura Real Estate Holdings is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Nomura Real Estate Holdings. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 Nomura Real Estate Holdings analysts - going out to 2029, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Nomura Real Estate Holdings (1 is a bit concerning) 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.