Earnings Update: Musashi Seimitsu Industry Co., Ltd. (TSE:7220) Just Reported Its Half-Yearly Results And Analysts Are Updating Their Forecasts

Shareholders of Musashi Seimitsu Industry Co., Ltd. (TSE:7220) will be pleased this week, given that the stock price is up 15% to JP¥2,195 following its latest half-yearly results. Results were roughly in line with estimates, with revenues of JP¥173b and statutory earnings per share of JP¥121. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Musashi Seimitsu Industry

Taking into account the latest results, the six analysts covering Musashi Seimitsu Industry provided consensus estimates of JP¥335.0b revenue in 2025, which would reflect a measurable 5.3% decline over the past 12 months. Statutory earnings per share are predicted to bounce 66% to JP¥185. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥356.0b and earnings per share (EPS) of JP¥186 in 2025. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The consensus has reconfirmed its price target of JP¥2,383, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Musashi Seimitsu Industry's market value. 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. Currently, the most bullish analyst values Musashi Seimitsu Industry at JP¥2,600 per share, while the most bearish prices it at JP¥2,000. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Musashi Seimitsu Industry is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Musashi Seimitsu Industry's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 10% annualised decline to the end of 2025. That is a notable change from historical growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Musashi Seimitsu Industry is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at JP¥2,383, 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 forecasts for Musashi Seimitsu Industry going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Musashi Seimitsu Industry .

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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.