Here's What Analysts Are Forecasting For Tokyo Electron Limited (TSE:8035) After Its Yearly Results

Investors in Tokyo Electron Limited (TSE:8035) had a good week, as its shares rose 3.5% to close at JP¥47,450 following the release of its annual results. The result was positive overall - although revenues of JP¥2.4t were in line with what the analysts predicted, Tokyo Electron surprised by delivering a statutory profit of JP¥1,255 per share, modestly greater than expected. 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. 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.

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After the latest results, the 21 analysts covering Tokyo Electron are now predicting revenues of JP¥3.05t in 2027. If met, this would reflect a major 25% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 16% to JP¥1,480. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥2.90t and earnings per share (EPS) of JP¥1,424 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Check out our latest analysis for Tokyo Electron

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of JP¥48,581, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. There are some variant perceptions on Tokyo Electron, with the most bullish analyst valuing it at JP¥70,000 and the most bearish at JP¥26,500 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. It's clear from the latest estimates that Tokyo Electron's rate of growth is expected to accelerate meaningfully, with the forecast 25% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 7.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. 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 biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Tokyo Electron's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at JP¥48,581, with the latest estimates not enough to have an impact on their price targets.

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 Tokyo Electron analysts - going out to 2029, and you can see them free on our platform here.

You still need to take note of risks, for example - Tokyo Electron has 1 warning sign we think 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.