Terumo Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Terumo Corporation (TSE:4543) just released its first-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 5.0% to hit JP¥312b. Terumo also reported a statutory profit of JP¥47.74, which was an impressive 77% above what the analysts had forecast. 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 most recent consensus for Terumo from twelve analysts is for revenues of JP¥1.25t in 2027. If met, it would imply an okay 5.7% increase on its revenue over the past 12 months. Per-share earnings are expected to expand 13% to JP¥126. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.24t and earnings per share (EPS) of JP¥114 in 2027. Although the revenue estimates have not really changed, we can see there's been a nice increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
Check out our latest analysis for Terumo
The consensus price target was unchanged at JP¥3,075, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Terumo at JP¥3,800 per share, while the most bearish prices it at JP¥2,450. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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. It's pretty clear that there is an expectation that Terumo's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 7.7% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Compare this to the 36 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.4% per year. So it's pretty clear that, while Terumo's revenue growth is expected to slow, it's expected to grow roughly in line with the 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 Terumo following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at JP¥3,075, 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 Terumo. Long-term earnings power is much more important than next year's profits. We have forecasts for Terumo going out to 2029, and you can see them free on our platform here.
Even so, be aware that Terumo 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.