Earnings Miss: Mazda Motor Corporation Missed EPS By 14% And Analysts Are Revising Their Forecasts
Investors in Mazda Motor Corporation (TSE:7261) had a good week, as its shares rose 5.1% to close at JP¥1,144 following the release of its half-year results. Statutory earnings per share of JP¥70.10 unfortunately missed expectations by 14%, although it was encouraging to see revenues of JP¥2.7t exceed expectations by 3.6%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following last week's earnings report, Mazda Motor's 15 analysts are forecasting 2027 revenues to be JP¥5.45t, approximately in line with the last 12 months. Statutory earnings per share are expected to descend 19% to JP¥159 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥5.43t and earnings per share (EPS) of JP¥160 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 Mazda Motor
There were no changes to revenue or earnings estimates or the price target of JP¥1,260, suggesting that the company has met expectations in its recent result. 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 Mazda Motor, with the most bullish analyst valuing it at JP¥1,500 and the most bearish at JP¥1,000 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Mazda Motor shareholders.
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. It's pretty clear that there is an expectation that Mazda Motor's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 3.0% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this to the 10 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 3.2% per year. Factoring in the forecast slowdown in growth, it looks like Mazda Motor is forecast to grow at about the same rate as 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Mazda Motor analysts - going out to 2029, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Mazda Motor you should be aware of.
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