Aichi Corporation Just Missed Revenue By 12%: Here's What Analysts Think Will Happen Next

As you might know, Aichi Corporation (TSE:6345) last week released its latest yearly, and things did not turn out so great for shareholders. Aichi reported an earnings miss, with JP¥53b revenues falling 12% short of analyst models, and statutory earnings per share (EPS) of JP¥70.26 also coming in slightly below expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Aichi after the latest results.

Check out our latest analysis for Aichi

Following the latest results, Aichi's twin analysts are now forecasting revenues of JP¥60.0b in 2025. This would be a notable 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 14% to JP¥80.50. In the lead-up to this report, the analysts had been modelling revenues of JP¥63.5b and earnings per share (EPS) of JP¥82.52 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The average price target climbed 13% to JP¥950despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

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. One thing stands out from these estimates, which is that Aichi is forecast to grow faster in the future than it has in the past, with revenues expected to display 13% annualised growth until the end of 2025. If achieved, this would be a much better result than the 1.3% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 4.8% per year. Not only are Aichi's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster 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 analyst estimates for Aichi going out as far as 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Aichi that you need to take into consideration.

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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.