Totetsu Kogyo Co., Ltd. (TSE:1835) Third-Quarter Results: Here's What Analysts Are Forecasting For Next Year

Totetsu Kogyo Co., Ltd. (TSE:1835) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was a workmanlike result, with revenues of JP¥41b coming in 2.5% ahead of expectations, and statutory earnings per share of JP¥241, in line with analyst appraisals. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Totetsu Kogyo

Taking into account the latest results, the consensus forecast from Totetsu Kogyo's three analysts is for revenues of JP¥163.3b in 2026. This reflects a credible 6.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 4.4% to JP¥313. In the lead-up to this report, the analysts had been modelling revenues of JP¥163.0b and earnings per share (EPS) of JP¥304 in 2026. So the consensus seems to have become somewhat more optimistic on Totetsu Kogyo's earnings potential following these results.

The consensus price target was unchanged at JP¥4,017, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Totetsu Kogyo analyst has a price target of JP¥4,300 per share, while the most pessimistic values it at JP¥3,700. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Totetsu Kogyo's rate of growth is expected to accelerate meaningfully, with the forecast 5.5% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 0.2% 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 2.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Totetsu Kogyo 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 Totetsu Kogyo'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. The consensus price target held steady at JP¥4,017, 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 Totetsu Kogyo. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Totetsu Kogyo going out to 2027, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Totetsu Kogyo that 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.