The Japan Steel Works, Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Shareholders might have noticed that The Japan Steel Works, Ltd. (TSE:5631) filed its yearly result this time last week. The early response was not positive, with shares down 2.1% to JP¥5,831 in the past week. Japan Steel Works missed revenue estimates by 7.6%, coming in atJP¥249b, although statutory earnings per share (EPS) of JP¥244 beat expectations, coming in 6.9% ahead of analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the current consensus from Japan Steel Works' six analysts is for revenues of JP¥293.3b in 2026. This would reflect a meaningful 18% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 9.4% to JP¥267. Before this earnings report, the analysts had been forecasting revenues of JP¥298.6b and earnings per share (EPS) of JP¥261 in 2026. So the consensus seems to have become somewhat more optimistic on Japan Steel Works' earnings potential following these results.

Check out our latest analysis for Japan Steel Works

There's been no major changes to the consensus price target of JP¥7,217, 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. Currently, the most bullish analyst values Japan Steel Works at JP¥7,900 per share, while the most bearish prices it at JP¥6,600. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Japan Steel Works is an easy business to forecast or the the analysts are all using similar assumptions.

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. The analysts are definitely expecting Japan Steel Works' growth to accelerate, with the forecast 18% annualised growth to the end of 2026 ranking favourably alongside historical growth of 5.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.4% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Japan Steel Works is expected to grow much faster than its 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 Japan Steel Works following these results. Happily, there were no major changes to revenue forecasts, with the business still 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 forecasts for Japan Steel Works going out to 2028, and you can see them free on our platform here.

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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.