Tokyo Electron Limited Just Recorded A 6.3% EPS Beat: Here's What Analysts Are Forecasting Next

Last week saw the newest annual earnings release from Tokyo Electron Limited (TSE:8035), an important milestone in the company's journey to build a stronger business. Tokyo Electron reported JP¥1.8t in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of JP¥784 beat expectations, being 6.3% higher than what the analysts expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Tokyo Electron after the latest results.

Check out our latest analysis for Tokyo Electron

Following the latest results, Tokyo Electron's 21 analysts are now forecasting revenues of JP¥2.20t in 2025. This would be a meaningful 20% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 25% to JP¥986. Before this earnings report, the analysts had been forecasting revenues of JP¥2.19t and earnings per share (EPS) of JP¥987 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of JP¥39,868, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Tokyo Electron analyst has a price target of JP¥48,500 per share, while the most pessimistic values it at JP¥30,000. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Tokyo Electron's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 14% p.a. 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 12% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Tokyo Electron to grow faster than the wider 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. The consensus price target held steady at JP¥39,868, 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 Electron. Long-term earnings power is much more important than next year's profits. We have forecasts for Tokyo Electron going out to 2027, 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 1 warning sign for Tokyo Electron 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com