THK Co., Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

As you might know, THK Co., Ltd. (TSE:6481) last week released its latest quarterly, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at JP¥85b, statutory earnings missed forecasts by an incredible 88%, coming in at just JP¥2.75 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following the latest results, THK's eleven analysts are now forecasting revenues of JP¥360.3b in 2025. This would be a reasonable 2.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 85% to JP¥146. Before this earnings report, the analysts had been forecasting revenues of JP¥363.0b and earnings per share (EPS) of JP¥156 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

See our latest analysis for THK

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥4,105, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values THK at JP¥5,100 per share, while the most bearish prices it at JP¥2,100. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. It's pretty clear that there is an expectation that THK's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.9% growth on an annualised basis. This is compared to a historical growth rate of 9.5% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.4% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than THK.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at JP¥4,105, 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 THK. Long-term earnings power is much more important than next year's profits. We have forecasts for THK going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for THK (1 makes us a bit uncomfortable!) that we have uncovered.

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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.