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

It's been a pretty great week for Nidec Corporation (TSE:6594) shareholders, with its shares surging 18% to JP¥2,511 in the week since its latest annual results. It looks like the results were a bit of a negative overall. While revenues of JP¥2.6t were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 7.6% to hit JP¥146 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the most recent consensus for Nidec from 17 analysts is for revenues of JP¥2.72t in 2026. If met, it would imply a reasonable 4.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to climb 20% to JP¥175. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥2.76t and earnings per share (EPS) of JP¥180 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

Check out our latest analysis for Nidec

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥3,753, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Nidec at JP¥5,000 per share, while the most bearish prices it at JP¥2,350. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Nidec's revenue growth is expected to slow, with the forecast 4.2% annualised growth rate until the end of 2026 being well below the historical 11% 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) 4.0% annually. So it's pretty clear that, while Nidec's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Nidec. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.

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 forecasts for Nidec going out to 2028, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Nidec that we have uncovered.

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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.