Sharp Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Sharp Corporation (TSE:6753) shareholders are probably feeling a little disappointed, since its shares fell 8.0% to JP¥790 in the week after its latest annual results. Revenues of JP¥2.2t fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of JP¥55.59 an impressive 72% ahead of estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

After the latest results, the consensus from Sharp's seven analysts is for revenues of JP¥1.94t in 2026, which would reflect a definite 10% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to fall 16% to JP¥46.93 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥1.96t and earnings per share (EPS) of JP¥64.20 in 2026. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

View our latest analysis for Sharp

The average price target fell 8.4% to JP¥670, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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 Sharp analyst has a price target of JP¥960 per share, while the most pessimistic values it at JP¥340. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. One more thing stood out to us about these estimates, and it's the idea that Sharp's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 10% to the end of 2026. This tops off a historical decline of 0.7% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 0.2% per year. So while a broad number of companies are forecast to grow, unfortunately Sharp is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sharp. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Sharp's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Sharp going out to 2028, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Sharp (of which 1 makes us a bit uncomfortable!) you should know about.

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.