Tokyo Century Corporation Just Beat EPS By 23%: Here's What Analysts Think Will Happen Next
Tokyo Century Corporation (TSE:8439) defied analyst predictions to release its quarterly results, which were ahead of market expectations. The company beat forecasts, with revenue of JP¥388b, some 5.9% above estimates, and statutory earnings per share (EPS) coming in at JP¥71.85, 23% ahead of expectations. 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. 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, Tokyo Century's six analysts currently expect revenues in 2027 to be JP¥1.52t, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 3.7% to JP¥264. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.52t and earnings per share (EPS) of JP¥255 in 2027. So the consensus seems to have become somewhat more optimistic on Tokyo Century's earnings potential following these results.
Check out our latest analysis for Tokyo Century
The consensus price target was unchanged at JP¥2,708, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Tokyo Century, with the most bullish analyst valuing it at JP¥3,000 and the most bearish at JP¥2,250 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Tokyo Century's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 2.1% growth on an annualised basis. This is compared to a historical growth rate of 3.2% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 1.0% per year. Even after the forecast slowdown in growth, it seems obvious that Tokyo Century is also expected 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 Tokyo Century's 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. The consensus price target held steady at JP¥2,708, 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. At Simply Wall St, we have a full range of analyst estimates for Tokyo Century going out to 2029, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for Tokyo Century (1 is a bit unpleasant!) that we have uncovered.
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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.