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Earnings Beat: Nitto Denko Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
Last week, you might have seen that Nitto Denko Corporation (TSE:6988) released its half-year result to the market. The early response was not positive, with shares down 4.9% to JP¥3,392 in the past week. Revenues were JP¥558b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of JP¥64.57 were also better than expected, beating analyst predictions by 15%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, Nitto Denko's ten analysts are now forecasting revenues of JP¥1.11t in 2027. This would be an okay 3.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 2.8% to JP¥218. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.11t and earnings per share (EPS) of JP¥219 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
Check out our latest analysis for Nitto Denko
There were no changes to revenue or earnings estimates or the price target of JP¥3,800, suggesting that the company has met expectations in its recent result. 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. Currently, the most bullish analyst values Nitto Denko at JP¥4,500 per share, while the most bearish prices it at JP¥3,200. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Nitto Denko's rate of growth is expected to accelerate meaningfully, with the forecast 6.7% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 4.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.6% annually. Nitto Denko is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
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. 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¥3,800, 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. At Simply Wall St, we have a full range of analyst estimates for Nitto Denko 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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