Earnings Beat: Shimano Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
Shimano Inc. (TSE:7309) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 7.1% to hit JP¥128b. Shimano reported statutory earnings per share (EPS) JP¥143, which was a notable 16% above what the analysts had forecast. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from Shimano's eleven analysts is for revenues of JP¥528.3b in 2027. This would reflect an okay 7.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 6.7% to JP¥734. In the lead-up to this report, the analysts had been modelling revenues of JP¥522.8b and earnings per share (EPS) of JP¥728 in 2027. 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 Shimano
It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥19,665. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Shimano analyst has a price target of JP¥23,500 per share, while the most pessimistic values it at JP¥16,000. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shimano's past performance and to peers in the same industry. For example, we noticed that Shimano's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 6.1% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 5.4% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.8% annually. So it looks like Shimano is expected to grow faster than its competitors, at least for a while.
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 major changes to revenue forecasts, with the business still 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 forecasts for Shimano going out to 2028, and you can see them free on our platform here.
We also provide an overview of the Shimano Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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