Analysts Are Updating Their Rinnai Corporation (TSE:5947) Estimates After Its Half-Yearly Results
Rinnai Corporation (TSE:5947) defied analyst predictions to release its half-yearly results, which were ahead of market expectations. The company beat expectations with revenues of JP¥240b arriving 2.1% ahead of forecasts. Statutory earnings per share (EPS) were JP¥51.88, 2.3% ahead of estimates. 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. 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 most recent consensus for Rinnai from eight analysts is for revenues of JP¥507.4b in 2027. If met, it would imply a modest 2.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 5.2% to JP¥260. Before this earnings report, the analysts had been forecasting revenues of JP¥506.8b and earnings per share (EPS) of JP¥259 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.
View our latest analysis for Rinnai
It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥4,346. 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 Rinnai analyst has a price target of JP¥5,000 per share, while the most pessimistic values it at JP¥4,100. This is a very narrow spread of estimates, implying either that Rinnai is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Rinnai's past performance and to peers in the same industry. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 5.5% growth on an annualised basis. That is in line with its 5.7% annual growth 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 revenues grow 3.4% per year. So it's pretty clear that Rinnai is forecast to grow substantially faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous 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. The consensus price target held steady at JP¥4,346, 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 Rinnai 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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