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

It's been a good week for Nidec Corporation (TSE:6594) shareholders, because the company has just released its latest interim results, and the shares gained 8.8% to JP¥3,123. It looks like a pretty bad result, all things considered. Although revenues of JP¥1.3t were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 20% to hit JP¥65.76 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Nidec

After the latest results, the 20 analysts covering Nidec are now predicting revenues of JP¥2.59t in 2025. If met, this would reflect an okay 4.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 99% to JP¥165. Before this earnings report, the analysts had been forecasting revenues of JP¥2.60t and earnings per share (EPS) of JP¥166 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥4,117. 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. Currently, the most bullish analyst values Nidec at JP¥5,100 per share, while the most bearish prices it at JP¥2,610. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Nidec's revenue growth is expected to slow, with the forecast 8.8% annualised growth rate until the end of 2025 being well below the historical 12% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.5% 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 important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share 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¥4,117, 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.

You can also see whether Nidec is carrying too much debt, and whether its balance sheet is healthy, for free on our 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.