Seiko Epson Corporation Just Recorded A 40% EPS Beat: Here's What Analysts Are Forecasting Next

A week ago, Seiko Epson Corporation (TSE:6724) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 9.2% to hit JP¥367b. Seiko Epson also reported a statutory profit of JP¥40.52, which was an impressive 40% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following last week's earnings report, Seiko Epson's seven analysts are forecasting 2027 revenues to be JP¥1.46t, approximately in line with the last 12 months. Per-share earnings are expected to surge 158% to JP¥198. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.44t and earnings per share (EPS) of JP¥189 in 2027. So the consensus seems to have become somewhat more optimistic on Seiko Epson's earnings potential following these results.

View our latest analysis for Seiko Epson

The consensus price target was unchanged at JP¥2,588, 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. There are some variant perceptions on Seiko Epson, with the most bullish analyst valuing it at JP¥3,800 and the most bearish at JP¥1,800 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Seiko Epson's revenue growth is expected to slow, with the forecast 0.4% annualised growth rate until the end of 2027 being well below the historical 5.0% 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 3.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that Seiko Epson is also expected to grow slower than other industry participants.

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 Seiko Epson following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Seiko Epson's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥2,588, 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 Seiko Epson. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Seiko Epson going out to 2029, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 3 warning signs for Seiko Epson you should know about.

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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.