Komatsu Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

A week ago, Komatsu Ltd. (TSE:6301) came out with a strong set of annual numbers that could potentially lead to a re-rate of the stock. Komatsu beat earnings, with revenues hitting JP¥4.1t, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 11%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

We've discovered 1 warning sign about Komatsu. View them for free.

Following last week's earnings report, Komatsu's ten analysts are forecasting 2026 revenues to be JP¥4.06t, approximately in line with the last 12 months. Statutory earnings per share are expected to drop 12% to JP¥417 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥4.06t and earnings per share (EPS) of JP¥440 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

See our latest analysis for Komatsu

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥4,821, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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 Komatsu, with the most bullish analyst valuing it at JP¥5,870 and the most bearish at JP¥4,000 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 Komatsu shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Komatsu's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 1.1% annualised decline to the end of 2026. That is a notable change from historical growth of 14% 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 4.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Komatsu is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Komatsu's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥4,821, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Komatsu analysts - going out to 2028, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Komatsu , and understanding it should be part of your investment process.

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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.