Analysts Have Made A Financial Statement On Tosoh Corporation's (TSE:4042) First-Quarter Report

Shareholders might have noticed that Tosoh Corporation (TSE:4042) filed its quarterly result this time last week. The early response was not positive, with shares down 9.5% to JP¥1,825 in the past week. Tosoh reported in line with analyst predictions, delivering revenues of JP¥253b and statutory earnings per share of JP¥180, suggesting the business is executing well and in line with its plan. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Tosoh after the latest results.

Check out our latest analysis for Tosoh

Taking into account the latest results, the consensus forecast from Tosoh's nine analysts is for revenues of JP¥1.10t in 2025. This reflects an okay 7.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 5.4% to JP¥200. Before this earnings report, the analysts had been forecasting revenues of JP¥1.10t and earnings per share (EPS) of JP¥204 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.

The consensus price target held steady at JP¥2,380, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Tosoh analyst has a price target of JP¥3,340 per share, while the most pessimistic values it at JP¥1,910. 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. The analysts are definitely expecting Tosoh's growth to accelerate, with the forecast 10% annualised growth to the end of 2025 ranking favourably alongside historical growth of 7.4% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Tosoh is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Tosoh. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at JP¥2,380, 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. At Simply Wall St, we have a full range of analyst estimates for Tosoh going out to 2027, and you can see them free on our platform here..

You can also see whether Tosoh is carrying too much debt, and whether its balance sheet is healthy, for free 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.

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