Furukawa Electric Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Furukawa Electric Co., Ltd. (TSE:5801) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. The company beat forecasts, with revenue of JP¥274b, some 7.3% above estimates, and statutory earnings per share (EPS) coming in at JP¥66.37, 676% ahead of expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Furukawa Electric after the latest results.

See our latest analysis for Furukawa Electric

Taking into account the latest results, Furukawa Electric's seven analysts currently expect revenues in 2025 to be JP¥1.10t, approximately in line with the last 12 months. Statutory per-share earnings are expected to be JP¥186, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.10t and earnings per share (EPS) of JP¥181 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.4% to JP¥4,049. 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. The most optimistic Furukawa Electric analyst has a price target of JP¥5,100 per share, while the most pessimistic values it at JP¥3,100. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Furukawa Electric's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.7% growth on an annualised basis. This is compared to a historical growth rate of 4.4% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.7% per year. Factoring in the forecast slowdown in growth, it seems obvious that Furukawa Electric is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Furukawa Electric's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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

You still need to take note of risks, for example - Furukawa Electric has 3 warning signs (and 2 which don't sit too well with us) 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.