Last week, you might have seen that Japan Aviation Electronics Industry, Limited (TSE:6807) released its half-yearly result to the market. The early response was not positive, with shares down 3.9% to JP¥2,485 in the past week. Results overall were not great, with earnings of JP¥15.67 per share falling drastically short of analyst expectations. Meanwhile revenues hit JP¥124b and were slightly better than forecasts. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, Japan Aviation Electronics Industry's eight analysts currently expect revenues in 2027 to be JP¥245.4b, approximately in line with the last 12 months. Per-share earnings are expected to surge 37% to JP¥109. In the lead-up to this report, the analysts had been modelling revenues of JP¥244.1b and earnings per share (EPS) of JP¥109 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.
Check out our latest analysis for Japan Aviation Electronics Industry
The analysts reconfirmed their price target of JP¥2,350, showing that the business is executing well and in line with 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. Currently, the most bullish analyst values Japan Aviation Electronics Industry at JP¥2,750 per share, while the most bearish prices it at JP¥2,100. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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. One thing stands out from these estimates, which is that Japan Aviation Electronics Industry is forecast to grow faster in the future than it has in the past, with revenues expected to display 3.7% annualised growth until the end of 2027. If achieved, this would be a much better result than the 0.2% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 11% per year. So although Japan Aviation Electronics Industry's revenue growth is expected to improve, it is still expected to grow slower than the industry.
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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at JP¥2,350, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Japan Aviation Electronics Industry going out to 2029, and you can see them free on our platform here.
You still need to take note of risks, for example - Japan Aviation Electronics Industry has 2 warning signs we think you should be aware of.
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