Results: Toho Titanium Co., Ltd. Beat Earnings Expectations And Analysts Now Have New Forecasts

Last week, you might have seen that Toho Titanium Co., Ltd. (TSE:5727) released its annual result to the market. The early response was not positive, with shares down 8.6% to JP¥1,256 in the past week. It looks to have been a bit of a mixed result. While revenues of JP¥78b fell 12% short of what the analysts had predicted, statutory earnings per share (EPS) of JP¥69.57 exceeded expectations by 9.2%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Toho Titanium

Taking into account the latest results, the consensus forecast from Toho Titanium's three analysts is for revenues of JP¥92.5b in 2025. This reflects a solid 18% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 28% to JP¥88.90. Before this earnings report, the analysts had been forecasting revenues of JP¥97.8b and earnings per share (EPS) of JP¥116 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 11% to JP¥2,025. 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 Toho Titanium at JP¥2,250 per share, while the most bearish prices it at JP¥1,800. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 18% growth on an annualised basis. That is in line with its 16% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.5% per year. So although Toho Titanium is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded Toho Titanium's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Toho Titanium's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Toho Titanium going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Toho Titanium (1 is potentially serious!) that you need to be mindful 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.