NEC Corporation (TSE:6701) First-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

It's been a mediocre week for NEC Corporation (TSE:6701) shareholders, with the stock dropping 10% to JP¥11,325 in the week since its latest quarterly results. It was a pretty bad result overall; while revenues were in line with expectations at JP¥690b, statutory losses exploded to JP¥21.90 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for NEC

Following last week's earnings report, NEC's twelve analysts are forecasting 2025 revenues to be JP¥3.42t, approximately in line with the last 12 months. Statutory per-share earnings are expected to be JP¥570, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥3.42t and earnings per share (EPS) of JP¥578 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of JP¥14,127, suggesting that the company has met expectations in its recent result. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic NEC analyst has a price target of JP¥16,500 per share, while the most pessimistic values it at JP¥11,500. 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.

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. We would highlight that revenue is expected to reverse, with a forecast 1.5% annualised decline to the end of 2025. That is a notable change from historical growth of 3.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - NEC is expected to lag 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that NEC's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 estimates - from multiple NEC analysts - going out to 2027, and you can see them free on our platform here.

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

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