JAPAN MATERIAL Co., Ltd. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Last week, you might have seen that JAPAN MATERIAL Co., Ltd. (TSE:6055) released its quarterly result to the market. The early response was not positive, with shares down 3.3% to JP¥1,600 in the past week. Results look mixed - while revenue fell marginally short of analyst estimates at JP¥12b, statutory earnings beat expectations 2.7%, with JAPAN MATERIAL reporting profits of JP¥19.00 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for JAPAN MATERIAL

Following the latest results, JAPAN MATERIAL's four analysts are now forecasting revenues of JP¥63.8b in 2026. This would be a huge 34% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 51% to JP¥98.02. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥66.6b and earnings per share (EPS) of JP¥102 in 2026. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The analysts made no major changes to their price target of JP¥2,360, suggesting the downgrades are not expected to have a long-term impact on JAPAN MATERIAL's valuation. 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. Currently, the most bullish analyst values JAPAN MATERIAL at JP¥2,740 per share, while the most bearish prices it at JP¥1,800. 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. The analysts are definitely expecting JAPAN MATERIAL's growth to accelerate, with the forecast 26% annualised growth to the end of 2026 ranking favourably alongside historical growth of 9.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect JAPAN MATERIAL to grow faster than 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 JAPAN MATERIAL. They also downgraded JAPAN MATERIAL's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at JP¥2,360, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for JAPAN MATERIAL going out to 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, 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.