Nichicon Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Shareholders of Nichicon Corporation (TSE:6996) will be pleased this week, given that the stock price is up 11% to JP¥1,107 following its latest interim results. The result was positive overall - although revenues of JP¥85b were in line with what the analysts predicted, Nichicon surprised by delivering a statutory profit of JP¥59.36 per share, modestly greater than expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Nichicon after the latest results.

See our latest analysis for Nichicon

Following last week's earnings report, Nichicon's seven analysts are forecasting 2025 revenues to be JP¥175.0b, approximately in line with the last 12 months. Statutory earnings per share are expected to drop 19% to JP¥74.39 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥176.2b and earnings per share (EPS) of JP¥67.81 in 2025. So the consensus seems to have become somewhat more optimistic on Nichicon's earnings potential following these results.

The consensus price target was unchanged at JP¥1,117, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Nichicon analyst has a price target of JP¥1,300 per share, while the most pessimistic values it at JP¥920. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Nichicon shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Nichicon's revenue growth is expected to slow, with the forecast 1.6% annualised growth rate until the end of 2025 being well below the historical 12% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that Nichicon is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Nichicon following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Nichicon'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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Nichicon going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Nichicon that we have uncovered.

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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.