Earnings Miss: Subaru Corporation Missed EPS By 7.6% And Analysts Are Revising Their Forecasts

Investors in Subaru Corporation (TSE:7270) had a good week, as its shares rose 8.9% to close at JP¥3,524 following the release of its interim results. It looks like the results were a bit of a negative overall. While revenues of JP¥2.4t were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 7.6% to hit JP¥124 per share. 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.

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Taking into account the latest results, the current consensus, from the 15 analysts covering Subaru, is for revenues of JP¥4.61t in 2026. This implies a noticeable 4.1% reduction in Subaru's revenue over the past 12 months. Statutory earnings per share are expected to plummet 36% to JP¥235 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥4.61t and earnings per share (EPS) of JP¥243 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

See our latest analysis for Subaru

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥3,097, 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. Currently, the most bullish analyst values Subaru at JP¥3,900 per share, while the most bearish prices it at JP¥2,250. 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 Subaru shareholders.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 8.0% by the end of 2026. This indicates a significant reduction from annual growth of 13% 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 2.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Subaru is expected to lag 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 Subaru. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Subaru's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥3,097, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Subaru analysts - going out to 2028, and you can see them free on our platform here.

You still need to take note of risks, for example - Subaru has 2 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.