Hitachi, Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

Hitachi, Ltd. (TSE:6501) shareholders are probably feeling a little disappointed, since its shares fell 8.3% to JP¥3,679 in the week after its latest half-year results. It looks like a pretty bad result, all things considered. Although revenues of JP¥4.5t were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 24% to hit JP¥25.42 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Hitachi

Taking into account the latest results, Hitachi's 15 analysts currently expect revenues in 2025 to be JP¥9.43t, approximately in line with the last 12 months. Statutory per share are forecast to be JP¥145, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of JP¥9.46t and earnings per share (EPS) of JP¥145 in 2025. 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.

There were no changes to revenue or earnings estimates or the price target of JP¥4,290, suggesting that the company has met expectations in its recent result. 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 Hitachi at JP¥5,400 per share, while the most bearish prices it at JP¥3,000. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Hitachi's revenue growth is expected to slow, with the forecast 2.4% annualised growth rate until the end of 2025 being well below the historical 3.5% 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 4.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that Hitachi 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.

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 Hitachi analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Hitachi .

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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.