Hitachi Construction Machinery Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

It's been a good week for Hitachi Construction Machinery Co., Ltd. (TSE:6305) shareholders, because the company has just released its latest half-yearly results, and the shares gained 5.5% to JP¥5,144. Revenues were JP¥654b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at JP¥124, an impressive 28% ahead of 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Taking into account the latest results, the ten analysts covering Hitachi Construction Machinery provided consensus estimates of JP¥1.32t revenue in 2026, which would reflect a perceptible 2.6% decline over the past 12 months. Statutory earnings per share are expected to sink 13% to JP¥357 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥1.33t and earnings per share (EPS) of JP¥345 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

Check out our latest analysis for Hitachi Construction Machinery

The consensus price target rose 6.5% to JP¥4,769, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Hitachi Construction Machinery analyst has a price target of JP¥5,900 per share, while the most pessimistic values it at JP¥4,000. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hitachi Construction Machinery's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 5.2% annualised decline to the end of 2026. That is a notable change from historical growth of 12% 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 4.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Hitachi Construction Machinery is expected to lag 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 Hitachi Construction Machinery 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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 Hitachi Construction Machinery going out to 2028, and you can see them free on our platform here.

You still need to take note of risks, for example - Hitachi Construction Machinery has 2 warning signs we think you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.