Hitachi, Ltd. Just Recorded A 13% EPS Beat: Here's What Analysts Are Forecasting Next

A week ago, Hitachi, Ltd. (TSE:6501) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. Hitachi beat earnings, with revenues hitting JP¥2.7t, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 13%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Following the latest results, Hitachi's 15 analysts are now forecasting revenues of JP¥11t in 2027. This would be an okay 3.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 16% to JP¥206. In the lead-up to this report, the analysts had been modelling revenues of JP¥11t and earnings per share (EPS) of JP¥203 in 2027. 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.

View our latest analysis for Hitachi

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥6,129. 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. There are some variant perceptions on Hitachi, with the most bullish analyst valuing it at JP¥7,100 and the most bearish at JP¥4,600 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Hitachi shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Hitachi is forecast to grow faster in the future than it has in the past, with revenues expected to display 4.2% annualised growth until the end of 2027. If achieved, this would be a much better result than the 0.02% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.8% annually for the foreseeable future. Although Hitachi's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

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 Hitachi's revenue is expected to 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.

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 estimates - from multiple Hitachi analysts - going out to 2029, and you can see them free on our platform here.

We also provide an overview of the Hitachi Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.