Earnings Beat: Rinnai Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Investors in Rinnai Corporation (TSE:5947) had a good week, as its shares rose 2.2% to close at JP¥3,385 following the release of its half-yearly results. Rinnai reported JP¥212b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of JP¥38.28 beat expectations, being 8.3% higher than what the analysts expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Rinnai after the latest results.

View our latest analysis for Rinnai

Taking into account the latest results, Rinnai's eight analysts currently expect revenues in 2025 to be JP¥457.2b, approximately in line with the last 12 months. Statutory earnings per share are forecast to decrease 6.2% to JP¥206 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥456.3b and earnings per share (EPS) of JP¥205 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥4,120. 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. Currently, the most bullish analyst values Rinnai at JP¥4,750 per share, while the most bearish prices it at JP¥3,100. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. We would highlight that Rinnai's revenue growth is expected to slow, with the forecast 3.4% annualised growth rate until the end of 2025 being well below the historical 6.4% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 1.5% per year. Even after the forecast slowdown in growth, it seems obvious that Rinnai is also expected to grow faster than 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, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at JP¥4,120, with the latest estimates not enough to have an impact on their price targets.

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. At Simply Wall St, we have a full range of analyst estimates for Rinnai going out to 2027, and you can see them free on our platform here..

You can also see our analysis of Rinnai's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.