Rinnai Corporation Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

It's been a pretty great week for Rinnai Corporation (TSE:5947) shareholders, with its shares surging 13% to JP¥3,822 in the week since its latest full-year results. Revenues were JP¥430b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of JP¥185 were also better than expected, beating analyst predictions by 11%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Rinnai

Taking into account the latest results, the most recent consensus for Rinnai from eight analysts is for revenues of JP¥459.0b in 2025. If met, it would imply a modest 6.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 8.4% to JP¥202. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥458.0b and earnings per share (EPS) of JP¥194 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of JP¥3,828, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Rinnai analyst has a price target of JP¥4,700 per share, while the most pessimistic values 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.

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. It's clear from the latest estimates that Rinnai's rate of growth is expected to accelerate meaningfully, with the forecast 6.7% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 5.5% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Rinnai to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Rinnai's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at JP¥3,828, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Rinnai. Long-term earnings power is much more important than next year's profits. We have forecasts for Rinnai going out to 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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

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.