Sumitomo Rubber Industries, Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

It's been a pretty great week for Sumitomo Rubber Industries, Ltd. (TSE:5110) shareholders, with its shares surging 14% to JP¥2,131 in the week since its latest third-quarter results. Statutory earnings per share fell badly short of expectations, coming in at JP¥44.27, some 30% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at JP¥289b. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Following the latest results, Sumitomo Rubber Industries' twelve analysts are now forecasting revenues of JP¥1.24t in 2026. This would be a modest 3.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 93% to JP¥233. Before this earnings report, the analysts had been forecasting revenues of JP¥1.24t and earnings per share (EPS) of JP¥232 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

View our latest analysis for Sumitomo Rubber Industries

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥2,014. 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. Currently, the most bullish analyst values Sumitomo Rubber Industries at JP¥2,300 per share, while the most bearish prices it at JP¥1,750. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Sumitomo Rubber Industries is an easy business to forecast or the the analysts are all using similar assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Sumitomo Rubber Industries' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 3.0% growth on an annualised basis. This is compared to a historical growth rate of 8.8% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.9% annually. So it's pretty clear that, while Sumitomo Rubber Industries' revenue growth is expected to slow, it's expected to grow roughly in line with the 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. 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¥2,014, 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 Sumitomo Rubber Industries. 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 Sumitomo Rubber Industries going out to 2027, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with Sumitomo Rubber Industries .

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.