Nishimatsu Construction Co., Ltd. Just Beat EPS By 28%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Nishimatsu Construction Co., Ltd. (TSE:1820) filed its yearly result this time last week. The early response was not positive, with shares down 5.4% to JP¥4,972 in the past week. It looks like a credible result overall - although revenues of JP¥367b were what the analysts expected, Nishimatsu Construction surprised by delivering a (statutory) profit of JP¥444 per share, an impressive 28% above what was 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the current consensus from Nishimatsu Construction's six analysts is for revenues of JP¥398.5b in 2026. This would reflect a solid 8.6% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 2.1% to JP¥454. In the lead-up to this report, the analysts had been modelling revenues of JP¥395.5b and earnings per share (EPS) of JP¥431 in 2026. So the consensus seems to have become somewhat more optimistic on Nishimatsu Construction's earnings potential following these results.

See our latest analysis for Nishimatsu Construction

There's been no major changes to the consensus price target of JP¥5,700, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Nishimatsu Construction, with the most bullish analyst valuing it at JP¥7,300 and the most bearish at JP¥4,600 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Nishimatsu Construction's rate of growth is expected to accelerate meaningfully, with the forecast 8.6% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 1.2% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Nishimatsu Construction to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Nishimatsu Construction following these results. 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¥5,700, 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 Nishimatsu Construction. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Nishimatsu Construction analysts - going out to 2028, and you can see them free on our platform here.

You still need to take note of risks, for example - Nishimatsu Construction has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

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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.