Hitachi Construction Machinery Co., Ltd. Just Beat EPS By 91%: Here's What Analysts Think Will Happen Next
Hitachi Construction Machinery Co., Ltd. (TSE:6305) last week reported its latest first-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were JP¥329b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at JP¥132, an impressive 91% ahead of estimates. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Hitachi Construction Machinery's nine analysts is for revenues of JP¥1.46t in 2027. This reflects a modest 2.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to decrease 3.0% to JP¥410 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥1.44t and earnings per share (EPS) of JP¥397 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
View our latest analysis for Hitachi Construction Machinery
There's been no major changes to the consensus price target of JP¥5,837, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Hitachi Construction Machinery, with the most bullish analyst valuing it at JP¥8,030 and the most bearish at JP¥4,300 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 Hitachi Construction Machinery's revenue growth is expected to slow, with the forecast 2.8% annualised growth rate until the end of 2027 being well below the historical 8.0% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.3% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Hitachi Construction Machinery.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Hitachi Construction Machinery's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at JP¥5,837, with the latest estimates not enough to have an impact on their price targets.
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 forecasts for Hitachi Construction Machinery going out to 2029, and you can see them free on our platform here.
You still need to take note of risks, for example - Hitachi Construction Machinery has 1 warning sign we think 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.