Earnings Beat: Takeuchi Mfg. Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Takeuchi Mfg. Co., Ltd. (TSE:6432) just released its latest annual results and things are looking bullish. The company beat expectations with revenues of JP¥213b arriving 2.5% ahead of forecasts. Statutory earnings per share (EPS) were JP¥549, 6.9% 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.

See our latest analysis for Takeuchi Mfg

After the latest results, the seven analysts covering Takeuchi Mfg are now predicting revenues of JP¥233.2b in 2025. If met, this would reflect a decent 9.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to reduce 4.5% to JP¥524 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥230.3b and earnings per share (EPS) of JP¥547 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 5.6% to JP¥5,620, suggesting the revised estimates are not indicative of a weaker long-term future for the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Takeuchi Mfg analyst has a price target of JP¥7,400 per share, while the most pessimistic values it at JP¥4,000. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. We would highlight that Takeuchi Mfg's revenue growth is expected to slow, with the forecast 9.7% annualised growth rate until the end of 2025 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.8% annually. So it's pretty clear that, while Takeuchi Mfg's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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 also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Takeuchi Mfg. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Takeuchi Mfg analysts - going out to 2027, and you can see them free on our platform here.

We also provide an overview of the Takeuchi Mfg Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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

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.