Shimano Inc. Just Missed EPS By 11%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Shimano Inc. (TSE:7309) filed its quarterly result this time last week. The early response was not positive, with shares down 9.4% to JP¥16,205 in the past week. It was not a great result overall. While revenues of JP¥114b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 11% to hit JP¥138 per share. 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.

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.

Taking into account the latest results, the most recent consensus for Shimano from eleven analysts is for revenues of JP¥496.3b in 2026. If met, it would imply an okay 6.2% increase on its revenue over the past 12 months. Per-share earnings are expected to swell 20% to JP¥707. In the lead-up to this report, the analysts had been modelling revenues of JP¥497.6b and earnings per share (EPS) of JP¥732 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

View our latest analysis for Shimano

The consensus price target held steady at JP¥18,821, 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 Shimano analyst has a price target of JP¥24,000 per share, while the most pessimistic values it at JP¥16,000. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Shimano's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 5.0% growth to the end of 2026 on an annualised basis. That is well above its historical decline of 0.04% 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 4.6% per year. So while Shimano's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shimano. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.

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. We have forecasts for Shimano going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Shimano has 1 warning sign we think you should be aware of.

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.