Earnings Update: Here's Why Analysts Just Lifted Their Ebara Corporation (TSE:6361) Price Target To JP¥3,944

Last week, you might have seen that Ebara Corporation (TSE:6361) released its third-quarter result to the market. The early response was not positive, with shares down 9.3% to JP¥3,926 in the past week. Results look mixed - while revenue fell marginally short of analyst estimates at JP¥215b, statutory earnings were in line with expectations, at JP¥155 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the latest results, Ebara's ten analysts are now forecasting revenues of JP¥974.9b in 2026. This would be a modest 5.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 16% to JP¥190. Before this earnings report, the analysts had been forecasting revenues of JP¥971.5b and earnings per share (EPS) of JP¥189 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

See our latest analysis for Ebara

The consensus price target rose 6.6% to JP¥3,944despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Ebara's earnings by assigning a price premium. 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 Ebara, with the most bullish analyst valuing it at JP¥5,000 and the most bearish at JP¥2,800 per share. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ebara's past performance and to peers in the same industry. We would highlight that Ebara's revenue growth is expected to slow, with the forecast 4.2% annualised growth rate until the end of 2026 being well below the historical 12% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.2% annually. Factoring in the forecast slowdown in growth, it seems obvious that Ebara is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Ebara's revenue is expected to 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.

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 estimates - from multiple Ebara analysts - going out to 2027, 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 2 warning signs with Ebara (at least 1 which doesn't sit too well with us) , and understanding these 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.