Revenue Miss: Toei Animation Co.,Ltd. Fell 11% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

Shareholders might have noticed that Toei Animation Co.,Ltd. (TSE:4816) filed its interim result this time last week. The early response was not positive, with shares down 4.4% to JP¥2,898 in the past week. Revenues were JP¥45b, 11% below analyst expectations, although losses didn't appear to worsen significantly, with a statutory per-share loss of JP¥116 being in line with what the analysts anticipated. 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. 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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Following the recent earnings report, the consensus from ten analysts covering Toei AnimationLtd is for revenues of JP¥93.9b in 2026. This implies a discernible 3.0% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to decrease 8.6% to JP¥109 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥93.6b and earnings per share (EPS) of JP¥108 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for Toei AnimationLtd

There were no changes to revenue or earnings estimates or the price target of JP¥3,747, suggesting that the company has met expectations in its recent result. 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 Toei AnimationLtd analyst has a price target of JP¥4,300 per share, while the most pessimistic values it at JP¥3,100. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Toei AnimationLtd shareholders.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 5.9% by the end of 2026. This indicates a significant reduction from annual growth of 15% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Toei AnimationLtd is expected to lag the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Toei AnimationLtd's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥3,747, 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 Toei AnimationLtd. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Toei AnimationLtd analysts - going out to 2028, and you can see them free on our platform here.

We also provide an overview of the Toei AnimationLtd Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.