JTEKT Corporation Just Missed EPS By 9.1%: Here's What Analysts Think Will Happen Next
Shareholders might have noticed that JTEKT Corporation (TSE:6473) filed its half-year result this time last week. The early response was not positive, with shares down 2.9% to JP¥1,982 in the past week. Revenues of JP¥479b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at JP¥24.87, missing estimates by 9.1%. 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.
Following last week's earnings report, JTEKT's six analysts are forecasting 2027 revenues to be JP¥1.99t, approximately in line with the last 12 months. Statutory earnings per share are predicted to leap 132% to JP¥157. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.96t and earnings per share (EPS) of JP¥163 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
See our latest analysis for JTEKT
The consensus price target held steady at JP¥2,673, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on JTEKT, with the most bullish analyst valuing it at JP¥3,080 and the most bearish at JP¥2,300 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that JTEKT's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 2.0% growth on an annualised basis. This is compared to a historical growth rate of 6.7% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that JTEKT is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for JTEKT. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that JTEKT's revenue is expected to perform worse 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 in mind, we wouldn't be too quick to come to a conclusion on JTEKT. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple JTEKT analysts - going out to 2029, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for JTEKT you should be aware of.
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