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

Investors in Fanuc Corporation (TSE:6954) had a good week, as its shares rose 6.2% to close at JP¥4,528 following the release of its full-year results. Fanuc reported JP¥795b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of JP¥140 beat expectations, being 6.3% higher than what the analysts expected. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Fanuc

Following last week's earnings report, Fanuc's 17 analysts are forecasting 2025 revenues to be JP¥796.5b, approximately in line with the last 12 months. Per-share earnings are expected to increase 3.1% to JP¥145. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥811.4b and earnings per share (EPS) of JP¥152 in 2025. 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.

The consensus price target held steady at JP¥4,762, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Fanuc analyst has a price target of JP¥5,600 per share, while the most pessimistic values it at JP¥3,300. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Fanuc's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.2% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.8% annually. Factoring in the forecast slowdown in growth, it seems obvious that Fanuc is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Fanuc. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at JP¥4,762, 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 Fanuc analysts - going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Fanuc 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.