The Sumitomo Rubber Industries, Ltd. (TSE:5110) Half-Yearly Results Are Out And Analysts Have Published New Forecasts

Last week saw the newest half-yearly earnings release from Sumitomo Rubber Industries, Ltd. (TSE:5110), an important milestone in the company's journey to build a stronger business. It looks like the results were a bit of a negative overall. While revenues of JP¥572b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.3% to hit JP¥41.12 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sumitomo Rubber Industries after the latest results.

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Taking into account the latest results, Sumitomo Rubber Industries' eleven analysts currently expect revenues in 2025 to be JP¥1.20t, approximately in line with the last 12 months. Earnings are expected to improve, with Sumitomo Rubber Industries forecast to report a statutory profit of JP¥179 per share. In the lead-up to this report, the analysts had been modelling revenues of JP¥1.21t and earnings per share (EPS) of JP¥185 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.

View our latest analysis for Sumitomo Rubber Industries

The consensus price target held steady at JP¥1,945, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Rubber Industries, with the most bullish analyst valuing it at JP¥2,500 and the most bearish at JP¥1,600 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sumitomo Rubber Industries' past performance and to peers in the same industry. We would highlight that Sumitomo Rubber Industries' revenue growth is expected to slow, with the forecast 0.9% 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 2.7% 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. The consensus price target held steady at JP¥1,945, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Sumitomo Rubber Industries analysts - going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Sumitomo Rubber Industries that you need to be mindful 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.