Sumitomo Rubber Industries, Ltd. Just Recorded A 274% EPS Beat: Here's What Analysts Are Forecasting Next

Sumitomo Rubber Industries, Ltd. (TSE:5110) shareholders are probably feeling a little disappointed, since its shares fell 2.9% to JP¥1,735 in the week after its latest full-year results. It looks like a credible result overall - although revenues of JP¥1.2t were what the analysts expected, Sumitomo Rubber Industries surprised by delivering a (statutory) profit of JP¥37.51 per share, an impressive 274% above what was forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Sumitomo Rubber Industries

Following last week's earnings report, Sumitomo Rubber Industries' nine analysts are forecasting 2025 revenues to be JP¥1.23t, approximately in line with the last 12 months. Statutory earnings per share are predicted to jump 460% to JP¥210. Before this earnings report, the analysts had been forecasting revenues of JP¥1.23t and earnings per share (EPS) of JP¥218 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 7.9% to JP¥2,103, suggesting the revised estimates are not indicative of a weaker long-term future for the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Sumitomo Rubber Industries at JP¥2,600 per share, while the most bearish prices it at JP¥1,650. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Sumitomo Rubber Industries' revenue growth is expected to slow, with the forecast 1.5% annualised growth rate until the end of 2025 being well below the historical 9.4% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.6% annually. Factoring in the forecast slowdown in growth, it seems obvious that Sumitomo Rubber Industries is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Sumitomo Rubber Industries' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Sumitomo Rubber Industries going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Sumitomo Rubber Industries that you should be aware of.

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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.