Ferrotec Corporation Beat Revenue Forecasts By 28%: Here's What Analysts Are Forecasting Next

Ferrotec Corporation (TSE:6890) shareholders are probably feeling a little disappointed, since its shares fell 3.3% to JP¥4,600 in the week after its latest half-yearly results. Revenue of JP¥141b came in a notable 28% ahead of expectations, while statutory earnings of JP¥334 were in line with what the analysts had been forecasting. 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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Taking into account the latest results, the most recent consensus for Ferrotec from four analysts is for revenues of JP¥287.3b in 2026. If met, it would imply a modest 2.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 37% to JP¥375. Before this earnings report, the analysts had been forecasting revenues of JP¥286.7b and earnings per share (EPS) of JP¥383 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Check out our latest analysis for Ferrotec

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 9.3% to JP¥5,100, suggesting the revised estimates are not indicative of a weaker long-term future for the business. 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 Ferrotec analyst has a price target of JP¥5,300 per share, while the most pessimistic values it at JP¥4,900. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Ferrotec's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 5.1% growth on an annualised basis. This is compared to a historical growth rate of 24% 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 8.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that Ferrotec is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ferrotec. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Ferrotec's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Ferrotec analysts - going out to 2028, and you can see them free on our platform here.

You still need to take note of risks, for example - Ferrotec has 2 warning signs we think 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.