The Subaru Corporation (TSE:7270) Yearly Results Are Out And Analysts Have Published New Forecasts

Shareholders might have noticed that Subaru Corporation (TSE:7270) filed its yearly result this time last week. The early response was not positive, with shares down 2.4% to JP¥2,614 in the past week. Revenues came in 2.4% below expectations, at JP¥4.7t. Statutory earnings per share were relatively better off, with a per-share profit of JP¥458 being roughly in line with analyst estimates. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following last week's earnings report, Subaru's 16 analysts are forecasting 2026 revenues to be JP¥4.59t, approximately in line with the last 12 months. Statutory earnings per share are forecast to sink 20% to JP¥371 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥4.67t and earnings per share (EPS) of JP¥385 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Check out our latest analysis for Subaru

The consensus price target held steady at JP¥2,626, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Subaru analyst has a price target of JP¥4,400 per share, while the most pessimistic values it at JP¥1,900. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 2.0% annualised decline to the end of 2026. 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 2.7% 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 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. 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. 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 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 2 warning signs for Subaru (1 is potentially serious!) 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.