Mitsubishi Motors Corporation Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts

It's been a sad week for Mitsubishi Motors Corporation (TSE:7211), who've watched their investment drop 19% to JP¥367 in the week since the company reported its quarterly result. Revenues fell 2.7% short of expectations, at JP¥682b. Earnings correspondingly dipped, with Mitsubishi Motors reporting a statutory loss of JP¥2.72 per share, whereas the analysts had previously modelled a profit in this period. 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.

View our latest analysis for Mitsubishi Motors

Taking into account the latest results, the consensus forecast from Mitsubishi Motors' twelve analysts is for revenues of JP¥2.86t in 2026. This reflects an okay 5.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 28% to JP¥81.76. Before this earnings report, the analysts had been forecasting revenues of JP¥2.84t and earnings per share (EPS) of JP¥88.94 in 2026. 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.

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥448, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Mitsubishi Motors, with the most bullish analyst valuing it at JP¥550 and the most bearish at JP¥380 per share. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Mitsubishi Motors' revenue growth is expected to slow, with the forecast 4.3% annualised growth rate until the end of 2026 being well below the historical 9.6% 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 3.1% annually. Even after the forecast slowdown in growth, it seems obvious that Mitsubishi Motors is also expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Mitsubishi Motors. 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. The consensus price target held steady at JP¥448, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Mitsubishi Motors analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that Mitsubishi Motors is showing 3 warning signs in our investment analysis , and 1 of those is a bit concerning...

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.