Tokyo Electron Limited Just Beat EPS By 27%: Here's What Analysts Think Will Happen Next

Tokyo Electron Limited (TSE:8035) investors will be delighted, with the company turning in some strong numbers with its latest results. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 11% higher than the analysts had forecast, at JP¥555b, while EPS were JP¥273 beating analyst models by 27%. 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'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 Tokyo Electron

Taking into account the latest results, the current consensus from Tokyo Electron's 19 analysts is for revenues of JP¥2.27t in 2025. This would reflect a notable 14% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 10% to JP¥1,018. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥2.25t and earnings per share (EPS) of JP¥1,005 in 2025. 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥38,993. 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 Tokyo Electron at JP¥47,100 per share, while the most bearish prices it at JP¥29,500. 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.

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. It's clear from the latest estimates that Tokyo Electron's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 13% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Tokyo Electron is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Tokyo Electron going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Tokyo Electron you should be aware 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.