Results: Daikin Industries,Ltd. Beat Earnings Expectations And Analysts Now Have New Forecasts

Daikin Industries,Ltd. (TSE:6367) defied analyst predictions to release its interim results, which were ahead of market expectations. Daikin IndustriesLtd beat earnings, with revenues hitting JP¥2.5t, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 20%. 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 Daikin IndustriesLtd after the latest results.

Check out our latest analysis for Daikin IndustriesLtd

Taking into account the latest results, Daikin IndustriesLtd's 17 analysts currently expect revenues in 2025 to be JP¥4.67t, approximately in line with the last 12 months. Statutory per-share earnings are expected to be JP¥898, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥4.66t and earnings per share (EPS) of JP¥900 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¥22,267, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Daikin IndustriesLtd at JP¥25,000 per share, while the most bearish prices it at JP¥18,000. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Daikin IndustriesLtd's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.1% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Daikin IndustriesLtd 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. 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 no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Daikin IndustriesLtd. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Daikin IndustriesLtd analysts - going out to 2027, and you can see them free on our platform here.

You can also see our analysis of Daikin IndustriesLtd's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.