Results: OMRON Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates

It's been a good week for OMRON Corporation (TSE:6645) shareholders, because the company has just released its latest yearly results, and the shares gained 9.0% to JP¥5,930. Revenues were JP¥819b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of JP¥41.17 were also better than expected, beating analyst predictions by 14%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for OMRON

Taking into account the latest results, the consensus forecast from OMRON's 13 analysts is for revenues of JP¥844.4b in 2025. This reflects a satisfactory 3.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 105% to JP¥84.30. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥865.4b and earnings per share (EPS) of JP¥167 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The analysts made no major changes to their price target of JP¥6,258, suggesting the downgrades are not expected to have a long-term impact on OMRON's valuation. 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 OMRON analyst has a price target of JP¥8,000 per share, while the most pessimistic values it at JP¥5,000. 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.

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. It's pretty clear that there is an expectation that OMRON's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.1% growth on an annualised basis. This is compared to a historical growth rate of 4.4% 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 7.0% 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 OMRON.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on OMRON. Long-term earnings power is much more important than next year's profits. We have forecasts for OMRON going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for OMRON (1 is concerning) 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.