East Japan Railway Company Just Missed EPS By 15%: Here's What Analysts Think Will Happen Next

Investors in East Japan Railway Company (TSE:9020) had a good week, as its shares rose 2.3% to close at JP¥3,756 following the release of its half-yearly results. Revenues were in line with forecasts, at JP¥1.5t, although statutory earnings per share came in 15% below what the analysts expected, at JP¥60.68 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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Following the latest results, East Japan Railway's twelve analysts are now forecasting revenues of JP¥3.04t in 2026. This would be a reasonable 3.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 5.0% to JP¥216. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥3.04t and earnings per share (EPS) of JP¥212 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.

See 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¥3,732. 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. There are some variant perceptions on East Japan Railway, with the most bullish analyst valuing it at JP¥4,700 and the most bearish at JP¥2,700 per share. 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 6.1% annualised growth rate until the end of 2026 being well below the historical 10% 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 2.1% annually. 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. 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.

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. We have estimates - from multiple East Japan Railway analysts - going out to 2028, and you can see them free on our platform here.

Even so, be aware that East Japan Railway is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...

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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.