Earnings Release: Here's Why Analysts Cut Their Ushio Inc. (TSE:6925) Price Target To JP¥1,925

Ushio Inc. (TSE:6925) shareholders are probably feeling a little disappointed, since its shares fell 3.9% to JP¥1,704 in the week after its latest yearly results. Results were roughly in line with estimates, with revenues of JP¥178b and statutory earnings per share of JP¥70.27. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ushio after the latest results.

We've discovered 2 warning signs about Ushio. View them for free.

Taking into account the latest results, the four analysts covering Ushio provided consensus estimates of JP¥172.8b revenue in 2026, which would reflect a perceptible 2.7% decline over the past 12 months. Per-share earnings are expected to accumulate 8.7% to JP¥83.90. In the lead-up to this report, the analysts had been modelling revenues of JP¥180.6b and earnings per share (EPS) of JP¥109 in 2026. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

See our latest analysis for Ushio

The consensus price target fell 8.7% to JP¥1,925, with the weaker earnings outlook clearly leading valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Ushio at JP¥2,200 per share, while the most bearish prices it at JP¥1,700. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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 revenue is expected to reverse, with a forecast 2.7% annualised decline to the end of 2026. That is a notable change from historical growth of 7.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.7% annually for the foreseeable future. It's pretty clear that Ushio's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ushio. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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

However, before you get too enthused, we've discovered 2 warning signs for Ushio that you should be aware of.

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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.