JFE Holdings, Inc. Just Missed EPS By 53%: Here's What Analysts Think Will Happen Next

As you might know, JFE Holdings, Inc. (TSE:5411) recently reported its half-yearly numbers. It looks like a pretty bad result, all things considered. Although revenues of JP¥2.5t were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 53% to hit JP¥23.53 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on JFE Holdings after the latest results.

View our latest analysis for JFE Holdings

Following last week's earnings report, JFE Holdings' seven analysts are forecasting 2025 revenues to be JP¥5.04t, approximately in line with the last 12 months. Statutory earnings per share are predicted to jump 20% to JP¥246. In the lead-up to this report, the analysts had been modelling revenues of JP¥5.09t and earnings per share (EPS) of JP¥300 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

The consensus price target held steady at JP¥2,319, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values JFE Holdings at JP¥3,250 per share, while the most bearish prices it at JP¥2,000. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 0.5% annualised decline to the end of 2025. That is a notable change from historical growth of 10% 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 2.0% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - JFE Holdings is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for JFE Holdings. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that JFE Holdings' revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥2,319, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on JFE Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for JFE Holdings going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for JFE Holdings that 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.