Earnings Beat: Tokyo Seimitsu Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Investors in Tokyo Seimitsu Co., Ltd. (TSE:7729) had a good week, as its shares rose 5.3% to close at JP¥10,860 following the release of its half-year results. Revenues were JP¥77b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of JP¥237 were also better than expected, beating analyst predictions by 19%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the consensus forecast from Tokyo Seimitsu's nine analysts is for revenues of JP¥163.7b in 2026. This reflects a credible 4.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 2.3% to JP¥547. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥159.6b and earnings per share (EPS) of JP¥563 in 2026. So it's pretty clear consensus is mixed on Tokyo Seimitsu after the latest results; whilethe analysts lifted revenue numbers, they also administered a minor downgrade to per-share earnings expectations.

View our latest analysis for Tokyo Seimitsu

There's been no major changes to the price target of JP¥10,829, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Tokyo Seimitsu, with the most bullish analyst valuing it at JP¥12,300 and the most bearish at JP¥8,500 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Tokyo Seimitsu's past performance and to peers in the same industry. The period to the end of 2026 brings more of the same, according to the analysts, with revenue forecast to display 9.9% growth on an annualised basis. That is in line with its 8.6% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.9% annually. So it's pretty clear that Tokyo Seimitsu is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at JP¥10,829, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Tokyo Seimitsu. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Tokyo Seimitsu analysts - going out to 2028, 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 2 warning signs for Tokyo Seimitsu 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.