Earnings Miss: Terumo Corporation Missed EPS By 9.8% And Analysts Are Revising Their Forecasts

Terumo Corporation (TSE:4543) shareholders are probably feeling a little disappointed, since its shares fell 2.1% to JP¥2,719 in the week after its latest yearly results. It looks like the results were a bit of a negative overall. While revenues of JP¥1.0t were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 9.8% to hit JP¥79.01 per share. 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. 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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Taking into account the latest results, the most recent consensus for Terumo from 14 analysts is for revenues of JP¥1.08t in 2026. If met, it would imply a reasonable 4.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 29% to JP¥102. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.09t and earnings per share (EPS) of JP¥101 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

See our latest analysis for Terumo

There were no changes to revenue or earnings estimates or the price target of JP¥3,196, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Terumo at JP¥3,800 per share, while the most bearish prices it at JP¥2,550. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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 Terumo's revenue growth is expected to slow, with the forecast 4.3% annualised growth rate until the end of 2026 being well below the historical 12% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that Terumo is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. 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¥3,196, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Terumo analysts - going out to 2028, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.