Nikon Corporation Just Missed EPS By 74%: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on Nikon Corporation (TSE:7731), given that the company fell short of expectations when it released its third-quarter results last week. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of JP¥180b missed by 12%, and statutory earnings per share of JP¥9.56 fell short of forecasts by 74%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Nikon

Taking into account the latest results, the most recent consensus for Nikon from eleven analysts is for revenues of JP¥741.8b in 2026. If met, it would imply a satisfactory 5.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 137% to JP¥96.55. Before this earnings report, the analysts had been forecasting revenues of JP¥744.5b and earnings per share (EPS) of JP¥98.86 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥1,636, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. There are some variant perceptions on Nikon, with the most bullish analyst valuing it at JP¥2,100 and the most bearish at JP¥1,200 per share. 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. It's pretty clear that there is an expectation that Nikon's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 4.6% growth on an annualised basis. This is compared to a historical growth rate of 7.5% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 0.9% per year. So it's pretty clear that, while Nikon's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Nikon 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 - Nikon has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.

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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.