Earnings Beat: Nippon Steel Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Nippon Steel Corporation (TSE:5401) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 3.6% to hit JP¥2.2t. Nippon Steel also reported a statutory profit of JP¥114, which was an impressive 33% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Nippon Steel

Taking into account the latest results, Nippon Steel's ten analysts currently expect revenues in 2026 to be JP¥8.69t, approximately in line with the last 12 months. Statutory earnings per share are predicted to grow 15% to JP¥519. In the lead-up to this report, the analysts had been modelling revenues of JP¥8.70t and earnings per share (EPS) of JP¥519 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥3,698. 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 Nippon Steel analyst has a price target of JP¥4,630 per share, while the most pessimistic values it at JP¥2,200. 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.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.8% by the end of 2026. This indicates a significant reduction from annual growth of 12% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Nippon Steel is expected to lag the wider industry.

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. The consensus price target held steady at JP¥3,698, with the latest estimates not enough to have an impact on their price targets.

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 Nippon Steel analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that Nippon Steel is showing 1 warning sign in our investment analysis , 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.