TDK Corporation (TSE:6762) just released its latest half-year results and things are looking bullish. The company beat expectations with revenues of JP¥1.6t arriving 2.1% ahead of forecasts. Statutory earnings per share (EPS) were JP¥50.49, 8.1% ahead of estimates. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the 17 analysts covering TDK are now predicting revenues of JP¥2.96t in 2027. If met, this would reflect a credible 2.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 3.3% to JP¥142. In the lead-up to this report, the analysts had been modelling revenues of JP¥2.96t and earnings per share (EPS) of JP¥140 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 TDK
It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥4,198. 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 TDK at JP¥5,200 per share, while the most bearish prices it at JP¥2,900. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of TDK'shistorical trends, as the 5.7% annualised revenue growth to the end of 2027 is roughly in line with the 6.9% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 10% annually. So it's pretty clear that TDK is expected to grow slower than similar companies in the same industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that TDK's revenue is expected to perform worse 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. We have forecasts for TDK going out to 2029, and you can see them free on our platform here.
Even so, be aware that TDK is showing 2 warning signs in our investment analysis , you should know about...
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.