Mitsubishi Heavy Industries, Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

It's been a good week for Mitsubishi Heavy Industries, Ltd. (TSE:7011) shareholders, because the company has just released its latest interim results, and the shares gained 2.9% to JP¥2,256. It was not a great result overall. Although revenues beat expectations, hitting JP¥2.3t, statutory earnings missed analyst forecasts by 13%, coming in at just JP¥13.33 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. 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.

Check out our latest analysis for Mitsubishi Heavy Industries

Following last week's earnings report, Mitsubishi Heavy Industries' 14 analysts are forecasting 2025 revenues to be JP¥4.98t, approximately in line with the last 12 months. Statutory earnings per share are predicted to swell 11% to JP¥78.31. In the lead-up to this report, the analysts had been modelling revenues of JP¥4.98t and earnings per share (EPS) of JP¥78.80 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 7.0% to JP¥2,186despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Mitsubishi Heavy Industries' earnings by assigning a price premium. 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. There are some variant perceptions on Mitsubishi Heavy Industries, with the most bullish analyst valuing it at JP¥2,700 and the most bearish at JP¥1,730 per share. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 3.9% growth on an annualised basis. That is in line with its 4.3% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.8% per year. So it's pretty clear that Mitsubishi Heavy Industries is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Mitsubishi Heavy Industries. Long-term earnings power is much more important than next year's profits. We have forecasts for Mitsubishi Heavy Industries 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 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.