Last week, you might have seen that Taiyo Yuden Co., Ltd. (TSE:6976) released its quarterly result to the market. The early response was not positive, with shares down 5.1% to JP¥9,699 in the past week. It looks like a pretty bad result, all things considered. Although revenues of JP¥94b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 46% to hit JP¥19.82 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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 Taiyo Yuden from 16 analysts is for revenues of JP¥401.3b in 2027. If met, it would imply a solid 10% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 67% to JP¥233. In the lead-up to this report, the analysts had been modelling revenues of JP¥397.6b and earnings per share (EPS) of JP¥221 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
Check out our latest analysis for Taiyo Yuden
There's been no major changes to the consensus price target of JP¥16,350, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Taiyo Yuden analyst has a price target of JP¥27,000 per share, while the most pessimistic values it at JP¥3,000. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on 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 Taiyo Yuden's past performance and to peers in the same industry. It's clear from the latest estimates that Taiyo Yuden's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 1.2% p.a. 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 9.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Taiyo Yuden is expected to grow much faster than its 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 Taiyo Yuden following these results. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Taiyo Yuden. Long-term earnings power is much more important than next year's profits. We have forecasts for Taiyo Yuden going out to 2029, and you can see them free on our platform here.
You still need to take note of risks, for example - Taiyo Yuden has 1 warning sign we think 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.