The half-yearly results for Toho Co., Ltd. (TSE:9602) were released last week, making it a good time to revisit its performance. It was not a great result overall. Although revenues beat expectations, hitting JP¥96b, statutory earnings missed analyst forecasts by 12%, coming in at just JP¥14.19 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Toho’s eleven analysts are now forecasting revenues of JP¥364.1b in 2027. This would be a reasonable 2.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 32% to JP¥60.83. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥365.8b and earnings per share (EPS) of JP¥59.34 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 Toho
The consensus price target was unchanged at JP¥1,778, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Toho, with the most bullish analyst valuing it at JP¥2,300 and the most bearish at JP¥1,500 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Toho’s past performance and to peers in the same industry. It’s pretty clear that there is an expectation that Toho’s revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 5.7% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.4% annually. Even after the forecast slowdown in growth, it seems obvious that Toho 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 Toho’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. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. We have forecasts for Toho going out to 2029, and you can see them free on our platform here.
We also provide an overview of the Toho Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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.
