Hirose Electric Co.,Ltd. Just Missed EPS By 9.9%: Here's What Analysts Think Will Happen Next

It's been a sad week for Hirose Electric Co.,Ltd. (TSE:6806), who've watched their investment drop 13% to JP¥17,550 in the week since the company reported its interim result. Revenues of JP¥53b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at JP¥246, missing estimates by 9.9%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the consensus forecast from Hirose ElectricLtd's 15 analysts is for revenues of JP¥203.3b in 2026. This reflects a modest 3.3% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be JP¥933, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of JP¥203.4b and earnings per share (EPS) of JP¥959 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

See our latest analysis for Hirose ElectricLtd

The consensus price target held steady at JP¥22,293, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Hirose ElectricLtd analyst has a price target of JP¥26,100 per share, while the most pessimistic values it at JP¥18,500. 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.

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. We can infer from the latest estimates that forecasts expect a continuation of Hirose ElectricLtd'shistorical trends, as the 6.6% annualised revenue growth to the end of 2026 is roughly in line with the 7.0% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.6% annually. It's clear that while Hirose ElectricLtd's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

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. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Hirose ElectricLtd. Long-term earnings power is much more important than next year's profits. We have forecasts for Hirose ElectricLtd going out to 2028, and you can see them free on our platform here.

You still need to take note of risks, for example - Hirose ElectricLtd 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.