Subaru Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Subaru Corporation (TSE:7270) just released its latest first-quarter results and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 15% higher than the analysts had forecast, at JP¥1.2t, while EPS were JP¥75.03 beating analyst models by 102%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the consensus from Subaru's 16 analysts is for revenues of JP¥4.52t in 2026, which would reflect a noticeable 6.0% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to plunge 44% to JP¥236 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥4.50t and earnings per share (EPS) of JP¥191 in 2026. Although the revenue estimates have not really changed, we can see there's been a very substantial lift in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

View our latest analysis for Subaru

The consensus price target was unchanged at JP¥2,591, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Subaru analyst has a price target of JP¥3,600 per share, while the most pessimistic values it at JP¥1,850. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 7.9% annualised decline to the end of 2026. That is a notable change from historical 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 2.4% 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 takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Subaru's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at JP¥2,591, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Subaru analysts - going out to 2028, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Subaru (1 is significant!) that 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.