Toei Animation Co.,Ltd. Just Missed EPS By 10%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Toei Animation Co.,Ltd. (TSE:4816) filed its quarterly result this time last week. The early response was not positive, with shares down 9.4% to JP¥3,180 in the past week. It was not a great result overall. Although revenues beat expectations, hitting JP¥24b, statutory earnings missed analyst forecasts by 10%, coming in at just JP¥22.93 per share. 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, the current consensus from Toei AnimationLtd's eight analysts is for revenues of JP¥98.5b in 2026. This would reflect a satisfactory 4.5% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 8.9% to JP¥111. Before this earnings report, the analysts had been forecasting revenues of JP¥99.4b and earnings per share (EPS) of JP¥111 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 5.5% to JP¥3,567. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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¥4,330 and the most bearish at JP¥2,200 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Toei AnimationLtd's revenue growth is expected to slow, with the forecast 3.6% annualised growth rate until the end of 2026 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. 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 most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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

And what about risks? Every company has them, and we've spotted 1 warning sign for Toei AnimationLtd you should know about.

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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.