Earnings Beat: Sumitomo Electric Industries, Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Sumitomo Electric Industries, Ltd. (TSE:5802) defied analyst predictions to release its half-year results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 3.0% to hit JP¥2.4t. Sumitomo Electric Industries also reported a statutory profit of JP¥80.54, which was an impressive 50% above what the analysts had forecast. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, Sumitomo Electric Industries' nine analysts currently expect revenues in 2026 to be JP¥4.74t, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 8.5% to JP¥300. In the lead-up to this report, the analysts had been modelling revenues of JP¥4.69t and earnings per share (EPS) of JP¥267 in 2026. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice increase in earnings per share expectations following these results.

Check out our latest analysis for Sumitomo Electric Industries

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 13% to JP¥5,075. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Sumitomo Electric Industries, with the most bullish analyst valuing it at JP¥7,000 and the most bearish at JP¥4,000 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Sumitomo Electric Industries shareholders.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.7% by the end of 2026. This indicates a significant reduction from annual growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.8% annually for the foreseeable future. It's pretty clear that Sumitomo Electric Industries' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Sumitomo Electric Industries' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Sumitomo Electric Industries going out to 2028, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Sumitomo Electric Industries that we have uncovered.

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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.