Aisin Corporation (TSE:7259) shareholders are probably feeling a little disappointed, since its shares fell 3.0% to JP¥2,081 in the week after its latest half-yearly results. It looks like a pretty bad result, all things considered. Although revenues of JP¥2.7t were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 42% to hit JP¥25.75 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Aisin after the latest results.
Taking into account the latest results, Aisin's 15 analysts currently expect revenues in 2027 to be JP¥5.32t, approximately in line with the last 12 months. Statutory earnings per share are expected to dip 2.8% to JP¥212 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥5.32t and earnings per share (EPS) of JP¥220 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
Check out our latest analysis for Aisin
It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥2,615, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. The most optimistic Aisin analyst has a price target of JP¥3,600 per share, while the most pessimistic values it at JP¥2,200. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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 Aisin's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 1.0% growth on an annualised basis. This is compared to a historical growth rate of 6.0% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.3% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Aisin.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than 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.
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. We have estimates - from multiple Aisin analysts - going out to 2029, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Aisin that you should be aware of.
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