Mitsubishi Motors Corporation Just Missed Earnings - But Analysts Have Updated Their Models

Investors in Mitsubishi Motors Corporation (TSE:7211) had a good week, as its shares rose 2.9% to close at JP¥406 following the release of its first-quarter results. It looks like a pretty bad result, all things considered. Although revenues of JP¥609b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 90% to hit JP¥0.55 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following last week's earnings report, Mitsubishi Motors' twelve analysts are forecasting 2026 revenues to be JP¥2.78t, approximately in line with the last 12 months. Statutory earnings per share are predicted to leap 186% to JP¥26.20. In the lead-up to this report, the analysts had been modelling revenues of JP¥2.76t and earnings per share (EPS) of JP¥33.64 in 2026. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

Check out our latest analysis for Mitsubishi Motors

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥423, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Mitsubishi Motors, with the most bullish analyst valuing it at JP¥550 and the most bearish at JP¥350 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 Mitsubishi Motors' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 0.3% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 2.4% annually. Factoring in the forecast slowdown in growth, it seems obvious that Mitsubishi Motors is also expected to grow slower than other industry participants.

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 Mitsubishi Motors' revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥423, 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 Mitsubishi Motors. Long-term earnings power is much more important than next year's profits. We have forecasts for Mitsubishi Motors going out to 2028, and you can see them free on our platform here.

You still need to take note of risks, for example - Mitsubishi Motors has 3 warning signs we think 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.