Earnings Miss: Kawasaki Heavy Industries, Ltd. Missed EPS By 13% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Kawasaki Heavy Industries, Ltd. (TSE:7012) filed its first-quarter result this time last week. The early response was not positive, with shares down 4.9% to JP¥2,694 in the past week. Revenues were in line with forecasts, at JP¥544b, although statutory earnings per share came in 13% below what the analysts expected, at JP¥18.74 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Following the latest results, Kawasaki Heavy Industries' 13 analysts are now forecasting revenues of JP¥2.57t in 2027. This would be a notable 8.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to shrink 2.9% to JP¥139 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥2.56t and earnings per share (EPS) of JP¥138 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for Kawasaki Heavy Industries

The analysts reconfirmed their price target of JP¥3,851, showing that the business is executing well and in line with expectations. 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. The most optimistic Kawasaki Heavy Industries analyst has a price target of JP¥4,900 per share, while the most pessimistic values it at JP¥2,630. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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 Kawasaki Heavy Industries'historical trends, as the 11% annualised revenue growth to the end of 2027 is roughly in line with the 10% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.2% per year. So although Kawasaki Heavy Industries is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Kawasaki Heavy Industries analysts - going out to 2029, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Kawasaki Heavy Industries (1 is concerning!) that we have uncovered.

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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.