Kokusai Electric Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Kokusai Electric Corporation (TSE:6525) just released its latest half-yearly results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 7.2% to hit JP¥117b. Kokusai Electric also reported a statutory profit of JP¥66.72, which was an impressive 23% above what the analysts had forecast. 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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Taking into account the latest results, Kokusai Electric's eleven analysts currently expect revenues in 2026 to be JP¥241.3b, approximately in line with the last 12 months. Statutory earnings per share are predicted to increase 2.6% to JP¥147. In the lead-up to this report, the analysts had been modelling revenues of JP¥246.0b and earnings per share (EPS) of JP¥155 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

View our latest analysis for Kokusai Electric

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 5.9% to JP¥4,583, suggesting the revised estimates are not indicative of a weaker long-term future for the business. 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 Kokusai Electric analyst has a price target of JP¥5,650 per share, while the most pessimistic values it at JP¥3,000. 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. We would highlight that revenue is expected to reverse, with a forecast 0.3% annualised decline to the end of 2026. That is a notable change from historical growth of 11% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Kokusai Electric is expected to lag 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 Kokusai Electric. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Kokusai Electric's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Kokusai Electric going out to 2028, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for Kokusai Electric that 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.