Earnings Beat: Makita Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

As you might know, Makita Corporation (TSE:6586) recently reported its third-quarter numbers. It looks like a credible result overall - although revenues of JP¥182b were what the analysts expected, Makita surprised by delivering a (statutory) profit of JP¥87.89 per share, an impressive 74% above what was forecast. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Makita

Taking into account the latest results, Makita's 15 analysts currently expect revenues in 2026 to be JP¥769.6b, approximately in line with the last 12 months. Statutory earnings per share are forecast to reduce 2.2% to JP¥265 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥776.3b and earnings per share (EPS) of JP¥251 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 6.3% to JP¥5,612, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Makita, with the most bullish analyst valuing it at JP¥6,500 and the most bearish at JP¥4,300 per share. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Makita's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 1.1% growth on an annualised basis. This is compared to a historical growth rate of 8.4% 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 4.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Makita is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Makita'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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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

We also provide an overview of the Makita 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.