Analysts Are Updating Their Toei Animation Co.,Ltd. (TSE:4816) Estimates After Its Interim Results

Investors in Toei Animation Co.,Ltd. (TSE:4816) had a good week, as its shares rose 7.7% to close at JP¥3,430 following the release of its interim results. Toei AnimationLtd reported in line with analyst predictions, delivering revenues of JP¥49b and statutory earnings per share of JP¥91.93, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Toei AnimationLtd after the latest results.

View our latest analysis for Toei AnimationLtd

Taking into account the latest results, Toei AnimationLtd's eight analysts currently expect revenues in 2025 to be JP¥92.7b, approximately in line with the last 12 months. Statutory per share are forecast to be JP¥102, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of JP¥90.5b and earnings per share (EPS) of JP¥96.76 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Despite these upgrades,the analysts have not made any major changes to their price target of JP¥3,009, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Toei AnimationLtd, with the most bullish analyst valuing it at JP¥4,080 and the most bearish at JP¥2,140 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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. It's pretty clear that there is an expectation that Toei AnimationLtd's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.7% growth on an annualised basis. This is compared to a historical growth rate of 14% 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 8.2% annually. Factoring in the forecast slowdown in growth, it seems obvious that Toei AnimationLtd is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Toei AnimationLtd's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at JP¥3,009, with the latest estimates not enough to have an impact on their price targets.

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 Toei AnimationLtd analysts - going out to 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months 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.