TKP Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Last week, you might have seen that TKP Corporation (TSE:3479) released its annual result to the market. The early response was not positive, with shares down 4.1% to JP¥1,609 in the past week. The result was positive overall - although revenues of JP¥37b were in line with what the analysts predicted, TKP surprised by delivering a statutory profit of JP¥167 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for TKP

Taking into account the latest results, the current consensus from TKP's three analysts is for revenues of JP¥43.2b in 2025. This would reflect a solid 18% increase on its revenue over the past 12 months. Statutory earnings per share are expected to tumble 37% to JP¥105 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥42.3b and earnings per share (EPS) of JP¥99.95 in 2025. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Despite these upgrades, the consensus price target fell 18% to JP¥1,900, perhaps signalling that the uplift in performance is not expected to last. 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 TKP at JP¥2,300 per share, while the most bearish prices it at JP¥1,500. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. One thing stands out from these estimates, which is that TKP is forecast to grow faster in the future than it has in the past, with revenues expected to display 18% annualised growth until the end of 2025. If achieved, this would be a much better result than the 0.3% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 4.2% per year. So it looks like TKP is expected to grow faster than its competitors, at least for a while.

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 TKP following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on TKP. Long-term earnings power is much more important than next year's profits. We have forecasts for TKP 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 1 warning sign for TKP 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.