Shimizu Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

A week ago, Shimizu Corporation (TSE:1803) came out with a strong set of half-year numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 6.0% to hit JP¥455b. Shimizu also reported a statutory profit of JP¥51.60, which was an impressive 186% above what the analysts had forecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the seven analysts covering Shimizu provided consensus estimates of JP¥1.96t revenue in 2026, which would reflect a measurable 2.4% decline over the past 12 months. Statutory earnings per share are forecast to drop 18% to JP¥122 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥1.96t and earnings per share (EPS) of JP¥124 in 2026. 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.

See our latest analysis for Shimizu

There were no changes to revenue or earnings estimates or the price target of JP¥2,141, 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. The most optimistic Shimizu analyst has a price target of JP¥2,500 per share, while the most pessimistic values it at JP¥1,800. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Shimizu shareholders.

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 4.7% annualised decline to the end of 2026. That is a notable change from historical growth of 7.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.6% annually for the foreseeable future. It's pretty clear that Shimizu's revenues are expected to perform substantially worse 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, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Shimizu'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.

With that in mind, we wouldn't be too quick to come to a conclusion on Shimizu. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Shimizu 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 Shimizu 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.