Earnings Beat: Daiwa House Industry Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

A week ago, Daiwa House Industry Co., Ltd. (TSE:1925) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 5.5% to hit JP¥1.3t. Daiwa House Industry also reported a statutory profit of JP¥143, which was an impressive 60% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Daiwa House Industry

Following last week's earnings report, Daiwa House Industry's nine analysts are forecasting 2025 revenues to be JP¥5.31t, approximately in line with the last 12 months. Statutory earnings per share are forecast to fall 19% to JP¥416 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥5.26t and earnings per share (EPS) of JP¥409 in 2025. 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.

The analysts reconfirmed their price target of JP¥4,566, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Daiwa House Industry, with the most bullish analyst valuing it at JP¥4,840 and the most bearish at JP¥4,100 per share. This is a very narrow spread of estimates, implying either that Daiwa House Industry is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Daiwa House Industry's past performance and to peers in the same industry. We would highlight that Daiwa House Industry's revenue growth is expected to slow, with the forecast 0.9% annualised growth rate until the end of 2025 being well below the historical 5.0% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.4% annually. Factoring in the forecast slowdown in growth, it seems obvious that Daiwa House Industry 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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 Daiwa House Industry analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Daiwa House Industry (1 is a bit concerning) 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.