Earnings Miss: Komatsu Ltd. Missed EPS By 6.2% And Analysts Are Revising Their Forecasts
Komatsu Ltd. (TSE:6301) shareholders are probably feeling a little disappointed, since its shares fell 7.8% to JP¥6,182 in the week after its latest half-year results. Komatsu beat revenue expectations by 5.7%, at JP¥2.2t. Statutory earnings per share (EPS) came in at JP¥108, some 6.2% short of analyst estimates. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following last week's earnings report, Komatsu's twelve analysts are forecasting 2027 revenues to be JP¥4.44t, approximately in line with the last 12 months. Statutory earnings per share are predicted to increase 2.1% to JP¥450. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥4.43t and earnings per share (EPS) of JP¥447 in 2027. 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.
View our latest analysis for Komatsu
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.2% to JP¥7,482. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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. There are some variant perceptions on Komatsu, with the most bullish analyst valuing it at JP¥9,630 and the most bearish at JP¥5,000 per share. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Komatsu's revenue growth is expected to slow, with the forecast 1.7% annualised growth rate until the end of 2027 being well below the historical 9.2% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.9% annually. Factoring in the forecast slowdown in growth, it seems obvious that Komatsu is also expected to grow slower than other industry participants.
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, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Komatsu's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Komatsu going out to 2029, and you can see them free on our platform here..
Plus, you should also learn about the 1 warning sign we've spotted with Komatsu .
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