TOWA Corporation Just Missed Earnings - But Analysts Have Updated Their Models

The analysts might have been a bit too bullish on TOWA Corporation (TSE:6315), given that the company fell short of expectations when it released its quarterly results last week. TOWA delivered a grave earnings miss, with both revenues (JP¥12b) and statutory earnings per share (JP¥17.68) falling badly short of analyst expectations. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for TOWA

Taking into account the latest results, the consensus forecast from TOWA's seven analysts is for revenues of JP¥63.4b in 2026. This reflects a notable 9.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 17% to JP¥133. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥65.4b and earnings per share (EPS) of JP¥139 in 2026. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the JP¥2,800 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. Currently, the most bullish analyst values TOWA at JP¥4,400 per share, while the most bearish prices it at JP¥1,600. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that TOWA's revenue growth is expected to slow, with the forecast 7.8% annualised growth rate until the end of 2026 being well below the historical 15% p.a. growth over the last five years. Compare this to the 58 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 8.3% per year. So it's pretty clear that, while TOWA's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for TOWA. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target held steady at JP¥2,800, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple TOWA analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with TOWA .

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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.