Earnings Update: Here's Why Analysts Just Lifted Their Trend Micro Incorporated (TSE:4704) Price Target To JP¥9,407

Investors in Trend Micro Incorporated (TSE:4704) had a good week, as its shares rose 5.7% to close at JP¥11,480 following the release of its annual results. It looks like the results were a bit of a negative overall. While revenues of JP¥273b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.5% to hit JP¥259 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Trend Micro

After the latest results, the eleven analysts covering Trend Micro are now predicting revenues of JP¥290.4b in 2025. If met, this would reflect a reasonable 6.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 17% to JP¥307. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥286.1b and earnings per share (EPS) of JP¥304 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.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 5.9% to JP¥9,407. It looks as though they previously had some doubts over whether the business would live up to their expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Trend Micro at JP¥13,000 per share, while the most bearish prices it at JP¥7,200. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Trend Micro's revenue growth is expected to slow, with the forecast 6.5% annualised growth rate until the end of 2025 being well below the historical 11% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.8% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Trend Micro.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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 Trend Micro 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 Trend Micro .

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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.