It's been a good week for Nikon Corporation (TSE:7731) shareholders, because the company has just released its latest first-quarter results, and the shares gained 4.8% to JP¥2,002. Although revenues of JP¥164b were in line with analyst expectations, Nikon surprised on the earnings front, with an unexpected (statutory) profit of JP¥3.91 per share a nice improvement on the losses that the analystsforecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for Nikon from nine analysts is for revenues of JP¥717.2b in 2027. If met, it would imply a reasonable 5.0% increase on its revenue over the past 12 months. Earnings are expected to improve, with Nikon forecast to report a statutory profit of JP¥28.52 per share. Before this earnings report, the analysts had been forecasting revenues of JP¥717.4b and earnings per share (EPS) of JP¥26.74 in 2027. So the consensus seems to have become somewhat more optimistic on Nikon's earnings potential following these results.
Check out our latest analysis for Nikon
The consensus price target was unchanged at JP¥1,704, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Nikon analyst has a price target of JP¥2,200 per share, while the most pessimistic values it at JP¥1,100. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Nikon'shistorical trends, as the 6.7% annualised revenue growth to the end of 2027 is roughly in line with the 6.3% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 3.4% annually. So it's pretty clear that Nikon is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Nikon following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at JP¥1,704, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Nikon. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Nikon analysts - going out to 2029, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Nikon that you need to be mindful of.
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