Mitsubishi Heavy Industries, Ltd. (TSE:7011) Just Missed Earnings: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on Mitsubishi Heavy Industries, Ltd. (TSE:7011), given that the company fell short of expectations when it released its half-year results last week. It looks like a clear earnings miss, with both revenues and earnings falling well short of analyst predictions. Revenues of JP¥2.1t missed by 18%, and statutory earnings per share of JP¥13.89 fell short of forecasts by 18%. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Following the latest results, Mitsubishi Heavy Industries' 15 analysts are now forecasting revenues of JP¥5.35t in 2026. This would be a reasonable 3.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 2.1% to JP¥84.09. Before this earnings report, the analysts had been forecasting revenues of JP¥5.46t and earnings per share (EPS) of JP¥85.43 in 2026. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

View our latest analysis for Mitsubishi Heavy Industries

The consensus price target rose 6.3% to JP¥4,330, with the analysts apparently satisfied with the business performance despite lower revenue forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Mitsubishi Heavy Industries analyst has a price target of JP¥5,300 per share, while the most pessimistic values it at JP¥3,400. 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 2026 brings more of the same, according to the analysts, with revenue forecast to display 7.0% growth on an annualised basis. That is in line with its 7.5% 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 5.0% per year. So it's pretty clear that Mitsubishi Heavy Industries is forecast to grow substantially faster than its 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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 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 2028, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Mitsubishi Heavy Industries that you need to be mindful 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.