Results: Nihon Kohden Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates

Shareholders in Nihon Kohden Corporation (TSE:6849) had a terrible week, as shares crashed 26% to JP¥1,694 in the week since its latest quarterly results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at JP¥46b, statutory earnings beat expectations by a notable 14%, coming in at JP¥4.57 per share. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Nihon Kohden

After the latest results, the nine analysts covering Nihon Kohden are now predicting revenues of JP¥229.7b in 2025. If met, this would reflect a modest 4.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 19% to JP¥99.44. In the lead-up to this report, the analysts had been modelling revenues of JP¥231.5b and earnings per share (EPS) of JP¥99.97 in 2025. 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.

With no major changes to earnings forecasts, the consensus price target fell 5.5% to JP¥2,375, suggesting that the analysts might have previously been hoping for an earnings upgrade. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Nihon Kohden analyst has a price target of JP¥3,600 per share, while the most pessimistic values it at JP¥1,700. 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.

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. The analysts are definitely expecting Nihon Kohden's growth to accelerate, with the forecast 6.3% annualised growth to the end of 2025 ranking favourably alongside historical growth of 3.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.8% annually. Nihon Kohden is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Nihon Kohden. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Nihon Kohden going out to 2027, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Nihon Kohden that you need to take into consideration.

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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.

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