Subaru Corporation (TSE:7270) Fell Short of Analyst Expectations: Here's What You Need To Know

It's shaping up to be a tough period for Subaru Corporation (TSE:7270), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Earnings fell badly short of analyst estimates, with JP¥1.1t revenues missing by 10%, and statutory earnings per share (EPS) of JP¥112 falling short of forecasts by some -12%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 Subaru

Taking into account the latest results, the most recent consensus for Subaru from 15 analysts is for revenues of JP¥4.89t in 2025. If met, it would imply a satisfactory 3.7% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to dip 9.1% to JP¥483 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥4.94t and earnings per share (EPS) of JP¥488 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of JP¥3,554, suggesting that the company has met expectations in its recent result. 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. Currently, the most bullish analyst values Subaru at JP¥4,400 per share, while the most bearish prices it at JP¥2,400. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Subaru's revenue growth is expected to slow, with the forecast 4.9% annualised growth rate until the end of 2025 being well below the historical 8.6% 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 Subaru is also expected to grow faster than 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. 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¥3,554, 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 Subaru analysts - going out to 2027, 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 (and 1 which is a bit unpleasant) we think you should know about.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com