Terumo Corporation Just Beat EPS By 12%: Here's What Analysts Think Will Happen Next

A week ago, Terumo Corporation (TSE:4543) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 6.2% to hit JP¥258b. Terumo reported statutory earnings per share (EPS) JP¥22.82, which was a notable 12% above what the analysts had forecast. 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.

View our latest analysis for Terumo

Taking into account the latest results, the consensus forecast from Terumo's 14 analysts is for revenues of JP¥1.00t in 2025. This reflects a reasonable 3.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 8.1% to JP¥85.73. Before this earnings report, the analysts had been forecasting revenues of JP¥1.00t and earnings per share (EPS) of JP¥85.58 in 2025. 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.

The analysts reconfirmed their price target of JP¥3,147, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Terumo at JP¥3,600 per share, while the most bearish prices it at JP¥2,500. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Terumo's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Terumo's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.2% growth on an annualised basis. This is compared to a historical growth rate of 9.9% 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 6.6% 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 Terumo.

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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Terumo. 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 Terumo going out to 2027, and you can see them free on our platform here..

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