As you might know, SoftBank Group Corp. (TSE:9984) just kicked off its latest first-quarter results with some very strong numbers. The company beat forecasts, with revenue of JP¥2.0t, some 3.2% above estimates, and statutory earnings per share (EPS) coming in at JP¥60.08, 36% ahead of expectations. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from SoftBank Group's 16 analysts is for revenues of JP¥8.41t in 2027. This would reflect a credible 5.2% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to tumble 80% to JP¥174 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥8.37t and earnings per share (EPS) of JP¥169 in 2027. So the consensus seems to have become somewhat more optimistic on SoftBank Group's earnings potential following these results.
See our latest analysis for SoftBank Group
There's been no major changes to the consensus price target of JP¥7,917, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic SoftBank Group analyst has a price target of JP¥11,100 per share, while the most pessimistic values it at JP¥3,140. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting SoftBank Group's growth to accelerate, with the forecast 7.0% annualised growth to the end of 2027 ranking favourably alongside historical growth of 5.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.4% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that SoftBank Group is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around SoftBank Group's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at JP¥7,917, with the latest estimates not enough to have an impact on their price targets.
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. At Simply Wall St, we have a full range of analyst estimates for SoftBank Group 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 4 warning signs for SoftBank Group you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.