Earnings Miss: DENSO Corporation Missed EPS By 9.0% And Analysts Are Revising Their Forecasts

The first-quarter results for DENSO Corporation (TSE:6902) were released last week, making it a good time to revisit its performance. It looks like the results were a bit of a negative overall. While revenues of JP¥1.8t were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 9.0% to hit JP¥28.50 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.

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Taking into account the latest results, DENSO's 16 analysts currently expect revenues in 2026 to be JP¥7.24t, approximately in line with the last 12 months. Statutory earnings per share are predicted to swell 20% to JP¥176. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥7.17t and earnings per share (EPS) of JP¥179 in 2026. 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.

View our latest analysis for DENSO

There were no changes to revenue or earnings estimates or the price target of JP¥2,405, suggesting that the company has met expectations in its recent result. 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 DENSO, with the most bullish analyst valuing it at JP¥2,700 and the most bearish at JP¥1,970 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await DENSO shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that DENSO's revenue growth is expected to slow, with the forecast 1.5% annualised growth rate until the end of 2026 being well below the historical 9.7% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 2.6% annually. Factoring in the forecast slowdown in growth, it seems obvious that DENSO is also expected to grow slower than other industry participants.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at JP¥2,405, 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 DENSO. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple DENSO analysts - going out to 2028, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, 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.