Toray Industries, Inc. Just Missed Earnings - But Analysts Have Updated Their Models

It's shaping up to be a tough period for Toray Industries, Inc. (TSE:3402), which a week ago released some disappointing interim results that could have a notable impact on how the market views the stock. Results showed a clear earnings miss, with JP¥1.2t revenue coming in 2.3% lower than what the analystsexpected. Statutory earnings per share (EPS) of JP¥13.07 missed the mark badly, arriving some 26% below what was expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 current consensus from Toray Industries' twelve analysts is for revenues of JP¥2.61t in 2026. This would reflect a credible 4.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 47% to JP¥57.94. Before this earnings report, the analysts had been forecasting revenues of JP¥2.62t and earnings per share (EPS) of JP¥58.24 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.

Check out our latest analysis for Toray Industries

The analysts reconfirmed their price target of JP¥1,105, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Toray Industries, with the most bullish analyst valuing it at JP¥1,350 and the most bearish at JP¥860 per share. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Toray Industries' rate of growth is expected to accelerate meaningfully, with the forecast 8.8% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 5.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Toray Industries is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. 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. The consensus price target held steady at JP¥1,105, 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 Toray Industries. Long-term earnings power is much more important than next year's profits. We have forecasts for Toray Industries going out to 2028, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Toray Industries that you should be aware of.

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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.