Earnings Miss: Daikin Industries,Ltd. Missed EPS By 28% And Analysts Are Revising Their Forecasts

It's been a sad week for Daikin Industries,Ltd. (TSE:6367), who've watched their investment drop 17% to JP¥17,525 in the week since the company reported its quarterly result. Revenue of JP¥1.3t surpassed estimates by 3.8%, although statutory earnings per share missed badly, coming in 28% below expectations at JP¥216 per share. 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.

View our latest analysis for Daikin IndustriesLtd

After the latest results, the 17 analysts covering Daikin IndustriesLtd are now predicting revenues of JP¥4.67t in 2025. If met, this would reflect a modest 2.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 13% to JP¥935. In the lead-up to this report, the analysts had been modelling revenues of JP¥4.64t and earnings per share (EPS) of JP¥949 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of JP¥25,213, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Daikin IndustriesLtd at JP¥33,000 per share, while the most bearish prices it at JP¥20,000. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Daikin IndustriesLtd's revenue growth is expected to slow, with the forecast 3.5% annualised growth rate until the end of 2025 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Daikin IndustriesLtd.

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 Daikin IndustriesLtd's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥25,213, with the latest estimates not enough to have an impact on their price targets.

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. At Simply Wall St, we have a full range of analyst estimates for Daikin IndustriesLtd going out to 2027, and you can see them free on our platform here..

It might also be worth considering whether Daikin IndustriesLtd's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.