Toly Bread Co.,Ltd. Just Missed Revenue By 13%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Toly Bread Co.,Ltd. (SHSE:603866) filed its quarterly result this time last week. The early response was not positive, with shares down 3.0% to CN¥5.58 in the past week. Revenues were CN¥1.6b, 13% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of CN¥0.36 being in line with what the analysts forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Toly BreadLtd after the latest results.

See our latest analysis for Toly BreadLtd

Taking into account the latest results, Toly BreadLtd's five analysts currently expect revenues in 2024 to be CN¥6.58b, approximately in line with the last 12 months. Per-share earnings are expected to rise 6.2% to CN¥0.38. Before this earnings report, the analysts had been forecasting revenues of CN¥7.14b and earnings per share (EPS) of CN¥0.37 in 2024. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

There's been no real change to the average price target of CN¥7.25, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Toly BreadLtd analyst has a price target of CN¥7.50 per share, while the most pessimistic values it at CN¥7.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Toly BreadLtd's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Toly BreadLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.3% growth on an annualised basis. This is compared to a historical growth rate of 4.6% 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 11% per year. Factoring in the forecast slowdown in growth, it seems obvious that Toly BreadLtd is also expected to grow slower than other industry participants.

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 Toly BreadLtd following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at CN¥7.25, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Toly BreadLtd. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Toly BreadLtd analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Toly BreadLtd is showing 1 warning sign in our investment analysis , 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.