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Tokyo Electron Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
It's been a good week for Tokyo Electron Limited (TSE:8035) shareholders, because the company has just released its latest interim results, and the shares gained 6.5% to JP¥10,005. It looks like a credible result overall - although revenues of JP¥1.7t were in line with what the analysts predicted, Tokyo Electron surprised by delivering a statutory profit of JP¥166 per share, a notable 13% above expectations. 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.
Taking into account the latest results, the current consensus from Tokyo Electron's 23 analysts is for revenues of JP¥3.53t in 2027. This would reflect a huge 20% increase on its revenue over the past 12 months. Per-share earnings are expected to expand 19% to JP¥372. In the lead-up to this report, the analysts had been modelling revenues of JP¥3.42t and earnings per share (EPS) of JP¥345 in 2027. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
View our latest analysis for Tokyo Electron
Despite these upgrades,the analysts have not made any major changes to their price target of JP¥15,278, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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¥20,400 per share, while the most pessimistic values it at JP¥9,600. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Tokyo Electron's past performance and to peers in the same industry. The analysts are definitely expecting Tokyo Electron's growth to accelerate, with the forecast 45% annualised growth to the end of 2027 ranking favourably alongside historical growth of 7.1% per annum 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 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Tokyo Electron is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Tokyo Electron following these results. Happily, they also upgraded their revenue estimates, and are forecasting them 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.
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 estimates - from multiple Tokyo Electron analysts - going out to 2029, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Tokyo Electron , and understanding them should be part of your investment process.
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