Earnings Beat: East Japan Railway Company Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for East Japan Railway Company (TSE:9020) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.9% to JP¥3,344. Revenues were JP¥715b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of JP¥69.56 were also better than expected, beating analyst predictions by 15%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Following the latest results, East Japan Railway's twelve analysts are now forecasting revenues of JP¥3.03t in 2026. This would be a reasonable 4.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 2.0% to JP¥207. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥3.03t and earnings per share (EPS) of JP¥206 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for East Japan Railway

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥3,423. 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 East Japan Railway at JP¥4,300 per share, while the most bearish prices it at JP¥2,700. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the East Japan Railway's past performance and to peers in the same industry. We would highlight that East Japan Railway's revenue growth is expected to slow, with the forecast 5.4% annualised growth rate until the end of 2026 being well below the historical 8.7% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.2% per year. Even after the forecast slowdown in growth, it seems obvious that East Japan Railway is also expected to grow faster 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, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at JP¥3,423, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on East Japan Railway. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for East Japan Railway going out to 2028, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for East Japan Railway (1 is significant) 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.