Earnings Miss: Bridgestone Corporation Missed EPS By 16% And Analysts Are Revising Their Forecasts

Investors in Bridgestone Corporation (TSE:5108) had a good week, as its shares rose 4.1% to close at JP¥5,821 following the release of its full-year results. Revenues were in line with forecasts, at JP¥4.4t, although statutory earnings per share came in 16% below what the analysts expected, at JP¥416 per share. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Bridgestone

Taking into account the latest results, Bridgestone's twelve analysts currently expect revenues in 2025 to be JP¥4.52t, approximately in line with the last 12 months. Statutory earnings per share are predicted to surge 23% to JP¥513. Before this earnings report, the analysts had been forecasting revenues of JP¥4.54t and earnings per share (EPS) of JP¥529 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at JP¥6,172, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Bridgestone analyst has a price target of JP¥7,000 per share, while the most pessimistic values it at JP¥5,400. 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 Bridgestone's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.9% growth on an annualised basis. This is compared to a historical growth rate of 8.5% 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 3.6% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Bridgestone.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Bridgestone's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥6,172, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Bridgestone. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Bridgestone analysts - going out to 2027, 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 Bridgestone 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.