Earnings Beat: Here's What Tokyo Ohka Kogyo Co., Ltd. (TSE:4186) Analysts Are Forecasting For This Year

A week ago, Tokyo Ohka Kogyo Co., Ltd. (TSE:4186) came out with a strong set of interim numbers that could potentially lead to a re-rate of the stock. The company beat expectations with revenues of JP¥95b arriving 7.5% ahead of forecasts. Statutory earnings per share (EPS) were JP¥45.78, 8.5% ahead of estimates. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Tokyo Ohka Kogyo

Taking into account the latest results, the most recent consensus for Tokyo Ohka Kogyo from 16 analysts is for revenues of JP¥194.0b in 2024. If met, it would imply a solid 8.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to expand 19% to JP¥162. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥190.7b and earnings per share (EPS) of JP¥157 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at JP¥4,851, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values Tokyo Ohka Kogyo at JP¥5,310 per share, while the most bearish prices it at JP¥3,600. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Tokyo Ohka Kogyo's rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.6% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Tokyo Ohka Kogyo to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Tokyo Ohka Kogyo following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Tokyo Ohka Kogyo analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Tokyo Ohka Kogyo , and understanding this should be part of your investment process.

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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.