Aisin Corporation Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Aisin Corporation (TSE:7259) shareholders are probably feeling a little disappointed, since its shares fell 2.9% to JP¥1,593 in the week after its latest half-year results. It was a pretty negative result overall, with revenues of JP¥2.4t missing analyst predictions by 2.7%. Worse, the business reported a statutory loss of JP¥6.81 per share, a substantial decline on analyst expectations of a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Aisin

Following last week's earnings report, Aisin's 14 analysts are forecasting 2025 revenues to be JP¥4.89t, approximately in line with the last 12 months. Per-share earnings are expected to bounce 333% to JP¥162. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥4.96t and earnings per share (EPS) of JP¥172 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥1,980, 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. The most optimistic Aisin analyst has a price target of JP¥2,533 per share, while the most pessimistic values it at JP¥1,450. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Aisin's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.3% growth on an annualised basis. This is compared to a historical growth rate of 7.1% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.6% annually. So it's pretty clear that, while Aisin's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

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 Aisin analysts - going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Aisin , and understanding them should be part of your investment process.

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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.