Results: Hino Motors, Ltd. Exceeded Expectations And The Consensus Has Updated Its Estimates

Last week, you might have seen that Hino Motors, Ltd. (TSE:7205) released its full-year result to the market. The early response was not positive, with shares down 4.2% to JP¥452 in the past week. It looks like a credible result overall - although revenues of JP¥1.5t were what the analysts expected, Hino Motors surprised by delivering a statutory profit of JP¥29.77 per share, instead of the previously forecast loss. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Hino Motors

After the latest results, the ten analysts covering Hino Motors are now predicting revenues of JP¥1.65t in 2025. If met, this would reflect a decent 9.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to crater 40% to JP¥17.80 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥1.64t and earnings per share (EPS) of JP¥27.84 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

The consensus price target held steady at JP¥491, 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 Hino Motors analyst has a price target of JP¥550 per share, while the most pessimistic values it at JP¥400. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hino Motors' past performance and to peers in the same industry. For example, we noticed that Hino Motors' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 9.1% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 5.7% a year 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 4.8% annually. So it looks like Hino Motors is expected to grow faster than its competitors, at least for a while.

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 no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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

And what about risks? Every company has them, and we've spotted 2 warning signs for Hino Motors (of which 1 shouldn't be ignored!) 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.