Earnings Miss: Mitsubishi Heavy Industries, Ltd. Missed EPS By 7.5% And Analysts Are Revising Their Forecasts

Last week saw the newest full-year earnings release from Mitsubishi Heavy Industries, Ltd. (TSE:7011), an important milestone in the company's journey to build a stronger business. Revenues of JP¥5.0t were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at JP¥73.04, missing estimates by 7.5%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Mitsubishi Heavy Industries after the latest results.

We've discovered 1 warning sign about Mitsubishi Heavy Industries. View them for free.

Taking into account the latest results, the most recent consensus for Mitsubishi Heavy Industries from 14 analysts is for revenues of JP¥5.42t in 2026. If met, it would imply a satisfactory 7.9% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 22% to JP¥89.38. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥5.38t and earnings per share (EPS) of JP¥93.17 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

View our latest analysis for Mitsubishi Heavy Industries

Despite cutting their earnings forecasts,the analysts have lifted their price target 5.9% to JP¥2,765, suggesting that these impacts are not expected to weigh on the stock's value in the long term. 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. Currently, the most bullish analyst values Mitsubishi Heavy Industries at JP¥3,200 per share, while the most bearish prices it at JP¥2,200. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Mitsubishi Heavy Industries shareholders.

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. The analysts are definitely expecting Mitsubishi Heavy Industries' growth to accelerate, with the forecast 7.9% annualised growth to the end of 2026 ranking favourably alongside historical growth of 6.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Mitsubishi Heavy Industries to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Mitsubishi Heavy Industries going out to 2028, 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 Mitsubishi Heavy Industries 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.