Seiko Group Corporation Beat Revenue Forecasts By 6.0%: Here's What Analysts Are Forecasting Next

Investors in Seiko Group Corporation (TSE:8050) had a good week, as its shares rose 2.1% to close at JP¥7,220 following the release of its interim results. Results overall were respectable, with statutory earnings of JP¥326 per share roughly in line with what the analysts had forecast. Revenues of JP¥83b came in 6.0% ahead of analyst predictions. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Following last week's earnings report, Seiko Group's three analysts are forecasting 2026 revenues to be JP¥315.5b, approximately in line with the last 12 months. Statutory earnings per share are expected to shrink 5.9% to JP¥395 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥313.2b and earnings per share (EPS) of JP¥389 in 2026. 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.

See our latest analysis for Seiko Group

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 5.9% to JP¥7,133. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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 Seiko Group analyst has a price target of JP¥9,200 per share, while the most pessimistic values it at JP¥4,400. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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 pretty clear that there is an expectation that Seiko Group's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 0.8% growth on an annualised basis. This is compared to a historical growth rate of 8.9% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.5% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Seiko Group.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 Seiko Group going out to 2028, and you can see them free on our platform here..

You can also view our analysis of Seiko Group's balance sheet, and whether we think Seiko Group is carrying too much debt, for free on our platform here.

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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.