Makino Milling Machine Co., Ltd. Just Beat EPS By 12%: Here's What Analysts Think Will Happen Next

Makino Milling Machine Co., Ltd. (TSE:6135) defied analyst predictions to release its annual results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 2.7% to hit JP¥225b. Makino Milling Machine reported statutory earnings per share (EPS) JP¥671, which was a notable 12% 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Makino Milling Machine

Following last week's earnings report, Makino Milling Machine's three analysts are forecasting 2025 revenues to be JP¥224.7b, approximately in line with the last 12 months. Statutory earnings per share are expected to sink 12% to JP¥590 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥220.6b and earnings per share (EPS) of JP¥562 in 2025. So the consensus seems to have become somewhat more optimistic on Makino Milling Machine's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 5.7% to JP¥6,133. 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. There are some variant perceptions on Makino Milling Machine, with the most bullish analyst valuing it at JP¥7,000 and the most bearish at JP¥5,100 per share. 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 Makino Milling Machine shareholders.

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. We would highlight that revenue is expected to reverse, with a forecast 0.3% annualised decline to the end of 2025. That is a notable change from historical growth of 7.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.9% per year. It's pretty clear that Makino Milling Machine's revenues are expected to perform substantially worse 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 Makino Milling Machine following these results. 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.

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 Makino Milling Machine going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Makino Milling Machine that we have uncovered.

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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.