Yamaha Motor Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Last week, you might have seen that Yamaha Motor Co., Ltd. (TSE:7272) released its interim result to the market. The early response was not positive, with shares down 2.7% to JP¥1,080 in the past week. Revenues of JP¥652b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of JP¥54.61 an impressive 24% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

After the latest results, the twelve analysts covering Yamaha Motor are now predicting revenues of JP¥2.60t in 2025. If met, this would reflect a reasonable 3.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 152% to JP¥125. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥2.59t and earnings per share (EPS) of JP¥130 in 2025. 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 Yamaha Motor

The consensus price target held steady at JP¥1,120, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Yamaha Motor at JP¥1,300 per share, while the most bearish prices it at JP¥1,000. This is a very narrow spread of estimates, implying either that Yamaha Motor is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Yamaha Motor's past performance and to peers in the same industry. We would highlight that Yamaha Motor's revenue growth is expected to slow, with the forecast 8.0% annualised growth rate until the end of 2025 being well below the historical 12% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.5% per year. 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 concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Yamaha Motor. 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. 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 Yamaha Motor analysts - going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Yamaha Motor (2 are a bit unpleasant!) that you need to take into consideration.

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

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.