Bridgestone Corporation Just Missed Earnings - But Analysts Have Updated Their Models

The analysts might have been a bit too bullish on Bridgestone Corporation (TSE:5108), given that the company fell short of expectations when it released its third-quarter results last week. Results showed a clear earnings miss, with JP¥1.1t revenue coming in 2.0% lower than what the analystsexpected. Statutory earnings per share (EPS) of JP¥78.33 missed the mark badly, arriving some 33% below what was expected. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Bridgestone

Taking into account the latest results, the current consensus from Bridgestone's 13 analysts is for revenues of JP¥4.60t in 2025. This would reflect an okay 4.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to climb 20% to JP¥548. In the lead-up to this report, the analysts had been modelling revenues of JP¥4.61t and earnings per share (EPS) of JP¥551 in 2025. 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.

The analysts reconfirmed their price target of JP¥6,257, 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. Currently, the most bullish analyst values Bridgestone at JP¥7,000 per share, while the most bearish prices it at JP¥5,500. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Bridgestone is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Bridgestone's past performance and to peers in the same industry. We would highlight that Bridgestone's revenue growth is expected to slow, with the forecast 3.9% annualised growth rate until the end of 2025 being well below the historical 7.7% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.5% annually. So it's pretty clear that, while Bridgestone's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Bridgestone going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for Bridgestone that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.