TDK Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

It's been a good week for TDK Corporation (TSE:6762) shareholders, because the company has just released its latest first-quarter results, and the shares gained 6.7% to JP¥10,185. It looks like a credible result overall - although revenues of JP¥519b were what the analysts expected, TDK surprised by delivering a (statutory) profit of JP¥157 per share, an impressive 95% above what was forecast. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for TDK

Taking into account the latest results, the most recent consensus for TDK from 16 analysts is for revenues of JP¥2.24t in 2025. If met, it would imply a satisfactory 5.9% increase on its revenue over the past 12 months. Statutory per share are forecast to be JP¥444, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of JP¥2.24t and earnings per share (EPS) of JP¥431 in 2025. So the consensus seems to have become somewhat more optimistic on TDK's earnings potential following these results.

The consensus price target rose 5.6% to JP¥10,406, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on TDK, with the most bullish analyst valuing it at JP¥13,500 and the most bearish at JP¥6,200 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We would highlight that TDK's revenue growth is expected to slow, with the forecast 7.9% annualised growth rate until the end of 2025 being well below the historical 12% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.2% annually. Factoring in the forecast slowdown in growth, it looks like TDK is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around TDK's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for TDK going out to 2027, and you can see them free on our platform here.

Even so, be aware that TDK is showing 1 warning sign in our investment analysis , you should know about...

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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.

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