Sumitomo Chemical India Limited (NSE:SUMICHEM) Analysts Just Cut Their EPS Forecasts Substantially

One thing we could say about the analysts on Sumitomo Chemical India Limited (NSE:SUMICHEM) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the latest downgrade, Sumitomo Chemical India's six analysts currently expect revenues in 2024 to be ₹30b, approximately in line with the last 12 months. Per-share earnings are expected to increase 5.5% to ₹7.77. Previously, the analysts had been modelling revenues of ₹35b and earnings per share (EPS) of ₹9.06 in 2024. Indeed, we can see that the analysts are a lot more bearish about Sumitomo Chemical India's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Sumitomo Chemical India

It'll come as no surprise then, to learn that the analysts have cut their price target 5.1% to ₹421.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 0.6% by the end of 2024. This indicates a significant reduction from annual growth of 10% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 10% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Sumitomo Chemical India is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Sumitomo Chemical India.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Sumitomo Chemical India analysts - going out to 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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