Mitsui & Co., Ltd. Just Beat EPS By 8.6%: Here's What Analysts Think Will Happen Next

Investors in Mitsui & Co., Ltd. (TSE:8031) had a good week, as its shares rose 2.2% to close at JP¥7,681 following the release of its full-year results. The result was positive overall - although revenues of JP¥13t were in line with what the analysts predicted, Mitsui surprised by delivering a statutory profit of JP¥706 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Mitsui

After the latest results, the consensus from Mitsui's eight analysts is for revenues of JP¥13t in 2025, which would reflect a perceptible 2.2% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to drop 15% to JP¥607 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥13t and earnings per share (EPS) of JP¥606 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.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 7.7% to JP¥7,555. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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. Currently, the most bullish analyst values Mitsui at JP¥8,500 per share, while the most bearish prices it at JP¥6,110. 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.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.2% by the end of 2025. This indicates a significant reduction from annual growth of 16% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 0.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Mitsui is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Mitsui's revenue is expected to 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 Mitsui. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Mitsui analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Mitsui has 2 warning signs we think 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.