Party Time: Brokers Just Made Major Increases To Their Tess Holdings Co.,Ltd. (TSE:5074) Earnings Forecasts

Tess Holdings Co.,Ltd. (TSE:5074) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the latest consensus from Tess HoldingsLtd's dual analysts is for revenues of JP¥41b in 2025, which would reflect a huge 24% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 26% to JP¥65.70. Previously, the analysts had been modelling revenues of JP¥34b and earnings per share (EPS) of JP¥18.00 in 2025. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for Tess HoldingsLtd

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of JP¥510, suggesting that the forecast performance does not have a long term impact on the company's valuation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Tess HoldingsLtd's growth to accelerate, with the forecast 18% annualised growth to the end of 2025 ranking favourably alongside historical growth of 1.7% per annum 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 2.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Tess HoldingsLtd to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Tess HoldingsLtd could be a good candidate for more research.

Analysts are definitely bullish on Tess HoldingsLtd, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including major dilution from new stock issuance in the past year. You can learn more, and discover the 2 other concerns we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com