It's been a mediocre week for Tokyo Electron Limited (TSE:8035) shareholders, with the stock dropping 12% to JP¥54,990 in the week since its latest quarterly results. Tokyo Electron missed revenue estimates by 2.9%, coming in atJP¥732b, although statutory earnings per share (EPS) of JP¥361 beat expectations, coming in 3.2% ahead of analyst 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 consensus forecast from Tokyo Electron's 22 analysts is for revenues of JP¥3.35t in 2027. This reflects a sizeable 28% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 21% to JP¥1,651. In the lead-up to this report, the analysts had been modelling revenues of JP¥3.26t and earnings per share (EPS) of JP¥1,594 in 2027. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Check out our latest analysis for Tokyo Electron
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of JP¥73,341, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. There are some variant perceptions on Tokyo Electron, with the most bullish analyst valuing it at JP¥99,000 and the most bearish at JP¥42,300 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Tokyo Electron's past performance and to peers in the same industry. The analysts are definitely expecting Tokyo Electron's growth to accelerate, with the forecast 38% annualised growth to the end of 2027 ranking favourably alongside historical growth of 7.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Tokyo Electron to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Tokyo Electron following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business 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. At Simply Wall St, we have a full range of analyst estimates for Tokyo Electron going out to 2029, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Tokyo Electron that you should be aware of.
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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.