Earnings Miss: The Yokohama Rubber Company, Limited Missed EPS By 30% And Analysts Are Revising Their Forecasts

The Yokohama Rubber Company, Limited (TSE:5101) just released its latest quarterly report and things are not looking great. Results showed a clear earnings miss, with JP¥258b revenue coming in 3.5% lower than what the analystsexpected. Statutory earnings per share (EPS) of JP¥88.93 missed the mark badly, arriving some 30% below what was expected. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Yokohama Rubber Company

Taking into account the latest results, the consensus forecast from Yokohama Rubber Company's ten analysts is for revenues of JP¥1.14t in 2025. This reflects an okay 6.3% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be JP¥522, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.14t and earnings per share (EPS) of JP¥522 in 2025. 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.

The analysts reconfirmed their price target of JP¥4,173, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Yokohama Rubber Company, with the most bullish analyst valuing it at JP¥4,700 and the most bearish at JP¥3,300 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 pretty clear that there is an expectation that Yokohama Rubber Company's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.0% growth on an annualised basis. This is compared to a historical growth rate of 14% 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 3.5% annually. So it's pretty clear that, while Yokohama Rubber Company's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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.

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. We have forecasts for Yokohama Rubber Company going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Yokohama Rubber Company (1 is a bit unpleasant!) that you need to be mindful 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.