Nichicon Corporation Just Missed Earnings - But Analysts Have Updated Their Models

Nichicon Corporation (TSE:6996) shareholders are probably feeling a little disappointed, since its shares fell 7.2% to JP¥1,246 in the week after its latest annual results. It was not a great result overall. While revenues of JP¥182b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 10% to hit JP¥121 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Nichicon

After the latest results, the six analysts covering Nichicon are now predicting revenues of JP¥187.0b in 2025. If met, this would reflect an okay 2.9% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be JP¥119, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of JP¥193.4b and earnings per share (EPS) of JP¥125 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the JP¥1,440 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on Nichicon, with the most bullish analyst valuing it at JP¥1,700 and the most bearish at JP¥1,300 per share. This is a very narrow spread of estimates, implying either that Nichicon is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Nichicon's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.9% growth on an annualised basis. This is compared to a historical growth rate of 12% 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 7.1% per year. 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 biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Nichicon. 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. The consensus price target held steady at JP¥1,440, with the latest estimates not enough to have an impact on their price targets.

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. 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..

You can also see whether Nichicon is carrying too much debt, and whether its balance sheet is healthy, for free 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.