Earnings Miss: JFE Holdings, Inc. Missed EPS By 29% And Analysts Are Revising Their Forecasts

JFE Holdings, Inc. (TSE:5411) last week reported its latest half-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like a pretty bad result, all things considered. Although revenues of JP¥2.4t were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 29% to hit JP¥35.47 per share. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the latest results, JFE Holdings’ nine analysts are now forecasting revenues of JP¥4.93t in 2027. This would be a satisfactory 4.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 37% to JP¥209. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥4.89t and earnings per share (EPS) of JP¥203 in 2027. So the consensus seems to have become somewhat more optimistic on JFE Holdings’ earnings potential following these results.

See our latest analysis for JFE Holdings

The consensus price target was unchanged at JP¥1,868, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic JFE Holdings analyst has a price target of JP¥2,200 per share, while the most pessimistic values it at JP¥1,650. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. The analysts are definitely expecting JFE Holdings’ growth to accelerate, with the forecast 9.6% annualised growth to the end of 2027 ranking favourably alongside historical growth of 0.9% per annum 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 4.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect JFE Holdings to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around JFE Holdings’ earnings potential next year. 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.

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 JFE Holdings going out to 2029, and you can see them free on our platform here.

You still need to take note of risks, for example – JFE Holdings has 2 warning signs (and 1 which is significant) we think you should know about.

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