Earnings Beat: TOWA Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

A week ago, TOWA Corporation (TSE:6315) came out with a strong set of half-year numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 8.8% to hit JP¥23b. TOWA also reported a statutory profit of JP¥24.66, which was an impressive 177% above what the analysts had forecast. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the current consensus from TOWA's seven analysts is for revenues of JP¥53.7b in 2026. This would reflect a decent 8.5% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be JP¥82.97, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of JP¥53.6b and earnings per share (EPS) of JP¥80.50 in 2026. So the consensus seems to have become somewhat more optimistic on TOWA's earnings potential following these results.

Check out our latest analysis for TOWA

The consensus price target rose 6.5% to JP¥2,280, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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. The most optimistic TOWA analyst has a price target of JP¥2,800 per share, while the most pessimistic values it at JP¥1,600. 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. The analysts are definitely expecting TOWA's growth to accelerate, with the forecast 18% annualised growth to the end of 2026 ranking favourably alongside historical growth of 9.4% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that TOWA is expected to grow much faster than its industry.

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 TOWA following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for TOWA going out to 2028, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with TOWA (including 1 which is significant) .

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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.