Results: IHI Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts
Shareholders might have noticed that IHI Corporation (TSE:7013) filed its quarterly result this time last week. The early response was not positive, with shares down 2.9% to JP¥2,745 in the past week. It looks like a credible result overall - although revenues of JP¥375b were what the analysts expected, IHI surprised by delivering a (statutory) profit of JP¥50.48 per share, an impressive 29% above what was forecast. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from IHI's eleven analysts is for revenues of JP¥1.85t in 2027. This would reflect a decent 10.0% increase on its revenue over the past 12 months. Statutory earnings per share are expected to fall 10% to JP¥171 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.84t and earnings per share (EPS) of JP¥169 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
Check out our latest analysis for IHI
There were no changes to revenue or earnings estimates or the price target of JP¥3,735, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic IHI analyst has a price target of JP¥5,700 per share, while the most pessimistic values it at JP¥2,900. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that IHI's 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 8.5% 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 6.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect IHI to grow faster than the wider 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. 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. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on IHI. Long-term earnings power is much more important than next year's profits. We have forecasts for IHI going out to 2029, and you can see them free on our platform here.
Even so, be aware that IHI is showing 3 warning signs in our investment analysis , and 2 of those are concerning...
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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.