Furukawa Electric Co., Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Furukawa Electric Co., Ltd. (TSE:5801) defied analyst predictions to release its interim results, which were ahead of market expectations. The company beat forecasts, with revenue of JP¥570b, some 3.8% above estimates, and statutory earnings per share (EPS) coming in at JP¥92.50, 170% ahead of expectations. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Furukawa Electric

Taking into account the latest results, Furukawa Electric's eight analysts currently expect revenues in 2025 to be JP¥1.13t, approximately in line with the last 12 months. Statutory earnings per share are forecast to decline 19% to JP¥252 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥1.10t and earnings per share (EPS) of JP¥206 in 2025. So it seems there's been a definite increase in optimism about Furukawa Electric's future following the latest results, with a considerable lift to the earnings per share forecasts in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of JP¥3,969, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. Currently, the most bullish analyst values Furukawa Electric at JP¥4,950 per share, while the most bearish prices it at JP¥3,300. 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. We would highlight that Furukawa Electric's revenue growth is expected to slow, with the forecast 0.5% annualised growth rate until the end of 2025 being well below the historical 5.4% 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 4.5% 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 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 Furukawa Electric following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at JP¥3,969, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Furukawa Electric 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 Furukawa Electric 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.