Nippon Steel Corporation Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Investors in Nippon Steel Corporation (TSE:5401) had a good week, as its shares rose 5.1% to close at JP¥3,208 following the release of its half-yearly results. Statutory earnings per share fell badly short of expectations, coming in at JP¥85.13, some 32% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at JP¥4.4t. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Nippon Steel

Following last week's earnings report, Nippon Steel's eight analysts are forecasting 2025 revenues to be JP¥8.70t, approximately in line with the last 12 months. Statutory earnings per share are expected to plunge 25% to JP¥353 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥8.86t and earnings per share (EPS) of JP¥381 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥3,800, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Nippon Steel analyst has a price target of JP¥4,700 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.

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. We would highlight that revenue is expected to reverse, with a forecast 3.1% annualised decline to the end of 2025. That is a notable change from historical 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 2.7% annually for the foreseeable future. It's pretty clear that Nippon Steel's revenues are expected to perform substantially worse than the wider industry.

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. The consensus price target held steady at JP¥3,800, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Nippon Steel going out to 2027, and you can see them free on our platform here..

You still need to take note of risks, for example - Nippon Steel has 2 warning signs we think you should be aware of.

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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.