Nidec Corporation Just Missed Earnings - But Analysts Have Updated Their Models

Nidec Corporation (TSE:6594) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues were in line with forecasts, at JP¥2.3t, although statutory earnings per share came in 14% below what the analysts expected, at JP¥218 per share. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Nidec

Taking into account the latest results, the most recent consensus for Nidec from 20 analysts is for revenues of JP¥2.51t in 2025. If met, it would imply a modest 7.0% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 49% to JP¥324. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥2.51t and earnings per share (EPS) of JP¥326 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.

The analysts reconfirmed their price target of JP¥7,625, showing that the business is executing well and in line with expectations. 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. The most optimistic Nidec analyst has a price target of JP¥10,200 per share, while the most pessimistic values it at JP¥4,600. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Nidec's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Nidec's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.0% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.2% per year. Even after the forecast slowdown in growth, it seems obvious that Nidec is also expected to grow faster than the wider 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, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at JP¥7,625, with the latest estimates not enough to have an impact on their price targets.

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

It might also be worth considering whether Nidec's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, 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.