Earnings Beat: Obayashi Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

As you might know, Obayashi Corporation (TSE:1802) recently reported its third-quarter numbers. Revenues were JP¥641b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at JP¥56.42, an impressive 143% ahead of 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Obayashi

Following last week's earnings report, Obayashi's eight analysts are forecasting 2026 revenues to be JP¥2.54t, approximately in line with the last 12 months. Statutory earnings per share are expected to decline 13% to JP¥150 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥2.53t and earnings per share (EPS) of JP¥149 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of JP¥2,435, suggesting that the company has met expectations in its recent result. 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. There are some variant perceptions on Obayashi, with the most bullish analyst valuing it at JP¥2,500 and the most bearish at JP¥2,300 per share. This is a very narrow spread of estimates, implying either that Obayashi is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Obayashi's revenue growth is expected to slow, with the forecast 1.0% annualised growth rate until the end of 2026 being well below the historical 5.0% 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 2.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Obayashi.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Obayashi's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥2,435, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Obayashi. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Obayashi analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Obayashi 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.