TDK Corporation Just Beat EPS By 48%: Here's What Analysts Think Will Happen Next
TDK Corporation (TSE:6762) just released its quarterly report and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 15% higher than the analysts had forecast, at JP¥741b, while EPS were JP¥42.45 beating analyst models by 48%. 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.
Taking into account the latest results, the consensus forecast from TDK's 17 analysts is for revenues of JP¥2.79t in 2027. This reflects a credible 2.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 3.3% to JP¥128. Before this earnings report, the analysts had been forecasting revenues of JP¥2.69t and earnings per share (EPS) of JP¥121 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 TDK
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of JP¥4,110, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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¥5,500 and the most bearish at JP¥2,150 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that TDK's revenue growth is expected to slow, with the forecast 3.9% annualised growth rate until the end of 2027 being well below the historical 6.7% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that TDK is also expected to grow slower than other industry participants.
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 TDK following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at JP¥4,110, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on TDK. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for TDK going out to 2029, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for TDK that we have uncovered.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.