Results: Tosei Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

A week ago, Tosei Corporation (TSE:8923) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 13% higher than the analysts had forecast, at JP¥18b, while EPS were JP¥37.51 beating analyst models by 96%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the current consensus from Tosei's four analysts is for revenues of JP¥116.9b in 2026. This would reflect a major 21% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 2.9% to JP¥314. Before this earnings report, the analysts had been forecasting revenues of JP¥115.4b and earnings per share (EPS) of JP¥313 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 Tosei

The consensus price target rose 6.9% to JP¥3,185despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Tosei's earnings by assigning a price premium. 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 Tosei at JP¥3,720 per share, while the most bearish prices it at JP¥2,650. 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 Tosei shareholders.

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 analysts are definitely expecting Tosei's growth to accelerate, with the forecast 16% annualised growth to the end of 2026 ranking favourably alongside historical growth of 8.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Tosei is expected to grow much faster than its 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Tosei going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Tosei (1 is a bit unpleasant!) that you need to take into consideration.

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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.