Nitto Denko Corporation Just Beat EPS By 8.0%: Here's What Analysts Think Will Happen Next

Investors in Nitto Denko Corporation (TSE:6988) had a good week, as its shares rose 2.4% to close at JP¥3,107 following the release of its quarterly results. The result was positive overall - although revenues of JP¥246b were in line with what the analysts predicted, Nitto Denko surprised by delivering a statutory profit of JP¥45.68 per share, modestly greater than expected. 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.

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Following the recent earnings report, the consensus from twelve analysts covering Nitto Denko is for revenues of JP¥988.8b in 2026. This implies a noticeable 2.2% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to reduce 5.2% to JP¥184 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥987.9b and earnings per share (EPS) of JP¥186 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

See our latest analysis for Nitto Denko

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥3,018. 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 Nitto Denko at JP¥3,800 per share, while the most bearish prices it at JP¥2,350. 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.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.9% by the end of 2026. This indicates a significant reduction from annual growth of 6.4% 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 4.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Nitto Denko 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Nitto Denko's revenue is expected to 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Nitto Denko analysts - going out to 2028, and you can see them free on our platform here.

We also provide an overview of the Nitto Denko Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.