Earnings Update: Murata Manufacturing Co., Ltd. (TSE:6981) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts

Investors in Murata Manufacturing Co., Ltd. (TSE:6981) had a good week, as its shares rose 4.3% to close at JP¥2,309 following the release of its first-quarter results. The result was positive overall - although revenues of JP¥416b were in line with what the analysts predicted, Murata Manufacturing surprised by delivering a statutory profit of JP¥26.83 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the consensus from Murata Manufacturing's 17 analysts is for revenues of JP¥1.67t in 2026, which would reflect a perceptible 3.8% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to reduce 7.2% to JP¥109 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥1.67t and earnings per share (EPS) of JP¥109 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

View our latest analysis for Murata Manufacturing

There were no changes to revenue or earnings estimates or the price target of JP¥2,724, 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. Currently, the most bullish analyst values Murata Manufacturing at JP¥3,600 per share, while the most bearish prices it at JP¥2,200. 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. We would highlight that revenue is expected to reverse, with a forecast 5.0% annualised decline to the end of 2026. That is a notable change from historical growth of 0.9% 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 6.2% annually for the foreseeable future. It's pretty clear that Murata Manufacturing's revenues are expected to perform substantially worse than 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 Murata Manufacturing'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 forecasts for Murata Manufacturing going out to 2028, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.