Sumitomo Electric Industries, Ltd. Just Recorded A 16% EPS Beat: Here's What Analysts Are Forecasting Next

It's been a pretty great week for Sumitomo Electric Industries, Ltd. (TSE:5802) shareholders, with its shares surging 11% to JP¥2,656 in the week since its latest yearly results. It looks like a credible result overall - although revenues of JP¥4.7t were in line with what the analysts predicted, Sumitomo Electric Industries surprised by delivering a statutory profit of JP¥248 per share, a notable 16% above expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, Sumitomo Electric Industries' seven analysts currently expect revenues in 2026 to be JP¥4.66t, approximately in line with the last 12 months. Statutory per share are forecast to be JP¥245, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥4.66t and earnings per share (EPS) of JP¥232 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

Check out our latest analysis for Sumitomo Electric Industries

The consensus price target was unchanged at JP¥3,044, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values Sumitomo Electric Industries at JP¥3,680 per share, while the most bearish prices it at JP¥2,800. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 0.4% annualised decline to the end of 2026. That is a notable change from historical 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 2.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Sumitomo Electric Industries is expected to lag 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. The consensus price target held steady at JP¥3,044, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Sumitomo Electric Industries going out to 2028, and you can see them free on our platform here.

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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.