Results: Hino Motors, Ltd. Delivered A Surprise Loss And Now Analysts Have New Forecasts

Investors in Hino Motors, Ltd. (TSE:7205) had a good week, as its shares rose 3.8% to close at JP¥453 following the release of its quarterly results. Revenues beat expectations by 12% to hit JP¥411b, although earnings fell badly short, with Hino Motors reported a statutory loss of JP¥0.39 per share even though the analysts had been forecasting a profit. 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. 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 Hino Motors

After the latest results, the eleven analysts covering Hino Motors are now predicting revenues of JP¥1.62t in 2025. If met, this would reflect a modest 4.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to plunge 76% to JP¥14.20 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥1.62t and earnings per share (EPS) of JP¥12.35 in 2025. Although the revenue estimates have not really changed, we can see there's been a nice increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target fell 5.3% to JP¥452, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. 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 Hino Motors analyst has a price target of JP¥500 per share, while the most pessimistic values it at JP¥370. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Hino Motors is forecast to grow faster in the future than it has in the past, with revenues expected to display 5.5% annualised growth until the end of 2025. If achieved, this would be a much better result than the 4.6% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.9% annually. So while Hino Motors' revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Hino Motors following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.

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 forecasts for Hino Motors going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Hino Motors has 3 warning signs (and 1 which is potentially serious) we think you should know about.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com