Last week, you might have seen that Mitsubishi Heavy Industries, Ltd. (TSE:7011) released its interim result to the market. The early response was not positive, with shares down 6.3% to JP¥3,151 in the past week. It was not a great result overall. Although revenues beat expectations, hitting JP¥2.5t, statutory earnings missed analyst forecasts by 13%, coming in at just JP¥20.41 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. 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, the current consensus from Mitsubishi Heavy Industries' 15 analysts is for revenues of JP¥5.72t in 2027. This would reflect an okay 6.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to expand 14% to JP¥142. In the lead-up to this report, the analysts had been modelling revenues of JP¥5.59t and earnings per share (EPS) of JP¥135 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
View our latest analysis for Mitsubishi Heavy Industries
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of JP¥5,338, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. There are some variant perceptions on Mitsubishi Heavy Industries, with the most bullish analyst valuing it at JP¥6,400 and the most bearish at JP¥3,000 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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. It's clear from the latest estimates that Mitsubishi Heavy Industries' rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 7.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Mitsubishi Heavy Industries is expected to grow much 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 Mitsubishi Heavy Industries following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Mitsubishi Heavy Industries going out to 2029, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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