Mitsubishi Chemical Group Corporation Just Missed EPS By 27%: Here's What Analysts Think Will Happen Next

It's been a good week for Mitsubishi Chemical Group Corporation (TSE:4188) shareholders, because the company has just released its latest annual results, and the shares gained 6.1% to JP¥757. Statutory earnings per share fell badly short of expectations, coming in at JP¥31.63, some 27% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at JP¥4.4t. 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.

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Taking into account the latest results, the current consensus, from the five analysts covering Mitsubishi Chemical Group, is for revenues of JP¥4.21t in 2026. This implies a small 4.5% reduction in Mitsubishi Chemical Group's revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 183% to JP¥89.68. Before this earnings report, the analysts had been forecasting revenues of JP¥4.31t and earnings per share (EPS) of JP¥84.46 in 2026. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

See our latest analysis for Mitsubishi Chemical Group

The consensus has made no major changes to the price target of JP¥988, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Mitsubishi Chemical Group at JP¥1,300 per share, while the most bearish prices it at JP¥600. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.5% by the end of 2026. This indicates a significant reduction from annual growth of 7.2% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.6% per year. It's pretty clear that Mitsubishi Chemical Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Mitsubishi Chemical Group's earnings potential next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings per share are more important to the intrinsic value of the business. 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 Mitsubishi Chemical Group. Long-term earnings power is much more important than next year's profits. We have forecasts for Mitsubishi Chemical Group going out to 2028, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Mitsubishi Chemical Group , and understanding these should be part of your investment process.

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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.