Earnings Miss: Yamaha Motor Co., Ltd. Missed EPS By 13% And Analysts Are Revising Their Forecasts

There's been a notable change in appetite for Yamaha Motor Co., Ltd. (TSE:7272) shares in the week since its half-year report, with the stock down 11% to JP¥1,180. Revenues were in line with forecasts, at JP¥1.3t, although statutory earnings per share came in 13% below what the analysts expected, at JP¥115 per share. 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.

See our latest analysis for Yamaha Motor

Following last week's earnings report, Yamaha Motor's twelve analysts are forecasting 2024 revenues to be JP¥2.59t, approximately in line with the last 12 months. Per-share earnings are expected to rise 9.4% to JP¥192. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥2.58t and earnings per share (EPS) of JP¥180 in 2024. So the consensus seems to have become somewhat more optimistic on Yamaha Motor's earnings potential following these results.

There's been no major changes to the consensus price target of JP¥1,586, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. There are some variant perceptions on Yamaha Motor, with the most bullish analyst valuing it at JP¥1,900 and the most bearish at JP¥1,300 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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 Yamaha Motor's revenue growth is expected to slow, with the forecast 4.0% annualised growth rate until the end of 2024 being well below the historical 11% 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 Yamaha Motor is also expected to grow faster than 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 Yamaha Motor's earnings potential next year. 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¥1,586, 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. At Simply Wall St, we have a full range of analyst estimates for Yamaha Motor going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Yamaha Motor you should be aware of, and 1 of them is a bit concerning.

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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.