Nitto Denko Corporation Just Missed Earnings - But Analysts Have Updated Their Models

Investors in Nitto Denko Corporation (TSE:6988) had a good week, as its shares rose 3.3% to close at JP¥2,828 following the release of its quarterly results. Statutory earnings per share fell badly short of expectations, coming in at JP¥40.92, some 28% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at JP¥257b. 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. 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 Nitto Denko

Taking into account the latest results, Nitto Denko's ten analysts currently expect revenues in 2026 to be JP¥1.01t, approximately in line with the last 12 months. Per-share earnings are expected to increase 5.9% to JP¥196. In the lead-up to this report, the analysts had been modelling revenues of JP¥1.01t and earnings per share (EPS) of JP¥194 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.

There were no changes to revenue or earnings estimates or the price target of JP¥2,834, suggesting that the company has met expectations in its recent result. 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 Nitto Denko analyst has a price target of JP¥3,400 per share, while the most pessimistic values it at JP¥2,100. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. It's pretty clear that there is an expectation that Nitto Denko's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 1.2% growth on an annualised basis. This is compared to a historical growth rate of 6.4% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Nitto Denko is also expected to grow slower than other industry participants.

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. At Simply Wall St, we have a full range of analyst estimates for Nitto Denko going out to 2027, and you can see them free on our platform here..

You can also see our analysis of Nitto Denko's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.