Renesas Electronics Corporation (TSE:6723) Half-Yearly Results: Here's What Analysts Are Forecasting For This Year

Renesas Electronics Corporation (TSE:6723) shareholders are probably feeling a little disappointed, since its shares fell 4.2% to JP¥1,827 in the week after its latest interim results. Revenue hit JP¥634b in line with forecasts, although the company reported a statutory loss per share of JP¥112 that was somewhat smaller than the analysts expected. 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.

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Following the latest results, Renesas Electronics' 15 analysts are now forecasting revenues of JP¥1.31t in 2025. This would be a satisfactory 2.8% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Renesas Electronics forecast to report a statutory profit of JP¥10.86 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.31t and earnings per share (EPS) of JP¥41.95 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

See our latest analysis for Renesas Electronics

The consensus price target held steady at JP¥2,614, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. The most optimistic Renesas Electronics analyst has a price target of JP¥3,200 per share, while the most pessimistic values it at JP¥2,000. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Renesas Electronics' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.6% growth on an annualised basis. This is compared to a historical growth rate of 13% 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 7.3% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Renesas Electronics.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Renesas Electronics' revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥2,614, 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 Renesas Electronics going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Renesas Electronics (1 is potentially serious!) that we have uncovered.

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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.