There's been a notable change in appetite for Sumitomo Chemical Company, Limited (TSE:4005) shares in the week since its half-year report, with the stock down 11% to JP¥519. Revenues were JP¥1.2t, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at JP¥25.38, an impressive 31% ahead of estimates. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Sumitomo Chemical Company's nine analysts is for revenues of JP¥2.48t in 2027. This reflects a modest 2.9% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be JP¥63.58, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of JP¥2.48t and earnings per share (EPS) of JP¥64.21 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
View our latest analysis for Sumitomo Chemical Company
The analysts reconfirmed their price target of JP¥658, showing that the business is executing well and in line with expectations. 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 Sumitomo Chemical Company, with the most bullish analyst valuing it at JP¥870 and the most bearish at JP¥500 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Sumitomo Chemical Company's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 6.0% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 3.7% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.5% per year. So while Sumitomo Chemical Company's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Sumitomo Chemical Company going out to 2029, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 4 warning signs for Sumitomo Chemical Company (1 is a bit unpleasant) you should be aware of.
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