East Japan Railway Company Just Missed Earnings - But Analysts Have Updated Their Models

Investors in East Japan Railway Company (TSE:9020) had a good week, as its shares rose 2.8% to close at JP¥3,045 following the release of its half-yearly results. It looks like the results were a bit of a negative overall. While revenues of JP¥1.4t were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.7% to hit JP¥124 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for East Japan Railway

Taking into account the latest results, East Japan Railway's ten analysts currently expect revenues in 2025 to be JP¥2.87t, approximately in line with the last 12 months. Statutory per share are forecast to be JP¥196, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of JP¥2.87t and earnings per share (EPS) of JP¥194 in 2025. 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.

There were no changes to revenue or earnings estimates or the price target of JP¥3,005, suggesting that the company has met expectations in its recent result. 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. Currently, the most bullish analyst values East Japan Railway at JP¥3,300 per share, while the most bearish prices it at JP¥2,600. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. The analysts are definitely expecting East Japan Railway's growth to accelerate, with the forecast 3.1% annualised growth to the end of 2025 ranking favourably alongside historical growth of 0.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that East Japan Railway is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at JP¥3,005, 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. We have estimates - from multiple East Japan Railway analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for East Japan Railway that 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.