Analysts Are Updating Their Shimadzu Corporation (TSE:7701) Estimates After Its Yearly Results

Last week, you might have seen that Shimadzu Corporation (TSE:7701) released its annual result to the market. The early response was not positive, with shares down 5.4% to JP¥3,461 in the past week. It looks like the results were a bit of a negative overall. While revenues of JP¥539b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.3% to hit JP¥184 per share. 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. 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 twelve analysts covering Shimadzu are now predicting revenues of JP¥552.0b in 2026. If met, this would reflect a satisfactory 2.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 3.6% to JP¥193. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥558.7b and earnings per share (EPS) of JP¥203 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Check out our latest analysis for Shimadzu

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥4,793, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Shimadzu at JP¥5,900 per share, while the most bearish prices it at JP¥3,900. 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 Shimadzu shareholders.

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 Shimadzu's revenue growth is expected to slow, with the forecast 2.4% annualised growth rate until the end of 2026 being well below the historical 7.8% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that Shimadzu is also expected to grow slower than other industry participants.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.

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

You can also see our analysis of Shimadzu's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.