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

It's been a pretty great week for Hitachi, Ltd. (TSE:6501) shareholders, with its shares surging 16% to JP¥5,318 in the week since its latest half-year results. It looks like a credible result overall - although revenues of JP¥4.8t were what the analysts expected, Hitachi surprised by delivering a (statutory) profit of JP¥61.62 per share, an impressive 60% above what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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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Taking into account the latest results, Hitachi's 14 analysts currently expect revenues in 2026 to be JP¥10t, approximately in line with the last 12 months. Statutory earnings per share are forecast to reduce 2.8% to JP¥171 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥10t and earnings per share (EPS) of JP¥166 in 2026. So the consensus seems to have become somewhat more optimistic on Hitachi's earnings potential following these results.

View our latest analysis for Hitachi

The consensus price target was unchanged at JP¥5,015, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on Hitachi, with the most bullish analyst valuing it at JP¥5,800 and the most bearish at JP¥3,900 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Hitachi's growth to accelerate, with the forecast 3.8% annualised growth to the end of 2026 ranking favourably alongside historical growth of 1.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 6.7% annually. So it's clear that despite the acceleration in growth, Hitachi is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Hitachi's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at JP¥5,015, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Hitachi. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Hitachi analysts - going out to 2028, and you can see them free on our platform here.

Even so, be aware that Hitachi is showing 1 warning sign in our investment analysis , you should know about...

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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.