Earnings Beat: Nomura Real Estate Holdings, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Last week, you might have seen that Nomura Real Estate Holdings, Inc. (TSE:3231) released its first-quarter result to the market. The early response was not positive, with shares down 6.6% to JP¥4,022 in the past week. It looks like a credible result overall - although revenues of JP¥201b were what the analysts expected, Nomura Real Estate Holdings surprised by delivering a (statutory) profit of JP¥141 per share, an impressive 51% above what was forecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Nomura Real Estate Holdings after the latest results.

Check out our latest analysis for Nomura Real Estate Holdings

Following the latest results, Nomura Real Estate Holdings' ten analysts are now forecasting revenues of JP¥792.3b in 2025. This would be a decent 9.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 4.1% to JP¥411. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥793.0b and earnings per share (EPS) of JP¥418 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥4,606. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Nomura Real Estate Holdings, with the most bullish analyst valuing it at JP¥5,100 and the most bearish at JP¥4,050 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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 clear from the latest estimates that Nomura Real Estate Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 1.9% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Nomura Real Estate Holdings to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at JP¥4,606, with the latest estimates not enough to have an impact on their price targets.

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 forecasts for Nomura Real Estate Holdings going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Nomura Real Estate Holdings (of which 1 is a bit unpleasant!) you should know about.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com