Last week saw the newest quarterly earnings release from TOCALO Co.,Ltd. (TSE:3433), an important milestone in the company's journey to build a stronger business. It was a workmanlike result, with revenues of JP¥17b coming in 6.4% ahead of expectations, and statutory earnings per share of JP¥169, in line with analyst appraisals. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on TOCALOLtd after the latest results.
Following the latest results, TOCALOLtd's three analysts are now forecasting revenues of JP¥68.9b in 2027. This would be a solid 15% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 7.7% to JP¥183. Before this earnings report, the analysts had been forecasting revenues of JP¥66.2b and earnings per share (EPS) of JP¥177 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
View our latest analysis for TOCALOLtd
It will come as no surprise to learn that the analysts have increased their price target for TOCALOLtd 37% to JP¥4,050on the back of these upgrades. 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. Currently, the most bullish analyst values TOCALOLtd at JP¥4,100 per share, while the most bearish prices it at JP¥4,000. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting TOCALOLtd is an easy business to forecast or the the analysts are all using similar assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting TOCALOLtd's growth to accelerate, with the forecast 20% annualised growth to the end of 2027 ranking favourably alongside historical growth of 7.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.3% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect TOCALOLtd 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 TOCALOLtd's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 estimates - from multiple TOCALOLtd analysts - 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 TOCALOLtd 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.