Earnings Miss: TOTO LTD. Missed EPS By 7.9% And Analysts Are Revising Their Forecasts
It's shaping up to be a tough period for TOTO LTD. (TSE:5332), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. Results look to have been somewhat negative - revenue fell 4.5% short of analyst estimates at JP¥169b, and statutory earnings of JP¥42.00 per share missed forecasts by 7.9%. 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 TOTO after the latest results.
Following the latest results, TOTO's nine analysts are now forecasting revenues of JP¥781.1b in 2027. This would be a credible 5.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 19% to JP¥295. Before this earnings report, the analysts had been forecasting revenues of JP¥782.5b and earnings per share (EPS) of JP¥294 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
View our latest analysis for TOTO
The analysts reconfirmed their price target of JP¥7,898, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values TOTO at JP¥11,100 per share, while the most bearish prices it at JP¥5,500. 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. The analysts are definitely expecting TOTO's growth to accelerate, with the forecast 7.4% annualised growth to the end of 2027 ranking favourably alongside historical growth of 3.3% 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 4.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that TOTO is expected to grow much 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at JP¥7,898, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for TOTO going out to 2029, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for TOTO you should know about.
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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.