DENSO Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

DENSO Corporation (TSE:6902) shareholders are probably feeling a little disappointed, since its shares fell 5.5% to JP¥2,240 in the week after its latest first-quarter results. It looks like a credible result overall - although revenues of JP¥1.8t were in line with what the analysts predicted, DENSO surprised by delivering a statutory profit of JP¥32.45 per share, a notable 16% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for DENSO

After the latest results, the 17 analysts covering DENSO are now predicting revenues of JP¥7.47t in 2025. If met, this would reflect a satisfactory 3.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 67% to JP¥185. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥7.42t and earnings per share (EPS) of JP¥188 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¥3,028, showing that the business is executing well and in line with expectations. 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. Currently, the most bullish analyst values DENSO at JP¥3,500 per share, while the most bearish prices it at JP¥2,550. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that DENSO's revenue growth is expected to slow, with the forecast 5.3% annualised growth rate until the end of 2025 being well below the historical 8.3% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.7% annually. Even after the forecast slowdown in growth, it seems obvious that DENSO is also expected to grow faster than the wider industry.

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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for DENSO going out to 2027, and you can see them free on our platform here..

We also provide an overview of the DENSO Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.

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