Tokyu Corporation (TSE:9005) Half-Yearly Results: Here's What Analysts Are Forecasting For This Year

It's been a good week for Tokyu Corporation (TSE:9005) shareholders, because the company has just released its latest interim results, and the shares gained 3.3% to JP¥1,757. Results look mixed - while revenue fell marginally short of analyst estimates at JP¥519b, statutory earnings were in line with expectations, at JP¥135 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the current consensus from Tokyu's seven analysts is for revenues of JP¥1.08t in 2026. This would reflect an okay 2.6% increase on its revenue over the past 12 months. Statutory earnings per share are expected to decrease 5.2% to JP¥143 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.08t and earnings per share (EPS) of JP¥140 in 2026. So the consensus seems to have become somewhat more optimistic on Tokyu's earnings potential following these results.

See our latest analysis for Tokyu

The consensus price target was unchanged at JP¥2,072, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on Tokyu, with the most bullish analyst valuing it at JP¥2,630 and the most bearish at JP¥1,800 per share. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Tokyu's rate of growth is expected to accelerate meaningfully, with the forecast 5.3% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 3.1% 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 2.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Tokyu to grow faster than 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 Tokyu's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Tokyu analysts - going out to 2028, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Tokyu 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.