Nippon Sanso Holdings Corporation Just Missed Earnings - But Analysts Have Updated Their Models

Nippon Sanso Holdings Corporation (TSE:4091) shareholders are probably feeling a little disappointed, since its shares fell 7.2% to JP¥4,799 in the week after its latest half-yearly results. It looks like a pretty bad result, all things considered. Although revenues of JP¥643b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 33% to hit JP¥46.46 per share. 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. 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 Nippon Sanso Holdings

Following last week's earnings report, Nippon Sanso Holdings' eight analysts are forecasting 2025 revenues to be JP¥1.30t, approximately in line with the last 12 months. Statutory earnings per share are predicted to increase 4.8% to JP¥258. Before this earnings report, the analysts had been forecasting revenues of JP¥1.31t and earnings per share (EPS) of JP¥264 in 2025. 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.

The consensus price target held steady at JP¥5,200, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Nippon Sanso Holdings at JP¥5,700 per share, while the most bearish prices it at JP¥4,700. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Nippon Sanso Holdings is an easy business to forecast or the the analysts are all using similar assumptions.

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 Nippon Sanso Holdings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.8% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that Nippon Sanso Holdings is also expected to grow slower than other industry participants.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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 in mind, we wouldn't be too quick to come to a conclusion on Nippon Sanso Holdings. 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 Nippon Sanso Holdings going out to 2027, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Nippon Sanso Holdings 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.