Results: Mabuchi Motor Co., Ltd. Beat Earnings Expectations And Analysts Now Have New Forecasts
It's been a good week for Mabuchi Motor Co., Ltd. (TSE:6592) shareholders, because the company has just released its latest half-yearly results, and the shares gained 7.6% to JP¥2,475. Revenues were JP¥95b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at JP¥45.08, an impressive 48% ahead of estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following last week's earnings report, Mabuchi Motor's ten analysts are forecasting 2025 revenues to be JP¥193.6b, approximately in line with the last 12 months. Per-share earnings are expected to soar 78% to JP¥134. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥190.8b and earnings per share (EPS) of JP¥127 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
See our latest analysis for Mabuchi Motor
The consensus price target was unchanged at JP¥2,554, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Mabuchi Motor at JP¥3,750 per share, while the most bearish prices it at JP¥2,200. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Mabuchi Motor's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 2.3% annualised decline to the end of 2025. That is a notable change from historical growth of 12% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Mabuchi Motor is expected to lag the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Mabuchi Motor's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Mabuchi Motor's revenue is expected to 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.
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 Mabuchi Motor analysts - going out to 2027, and you can see them free on our platform here.
It is also worth noting that we have found 3 warning signs for Mabuchi Motor that you need to take into consideration.
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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.