SMC Corporation Just Missed EPS By 11%: Here's What Analysts Think Will Happen Next

SMC Corporation (TSE:6273) shareholders are probably feeling a little disappointed, since its shares fell 3.1% to JP¥50,000 in the week after its latest quarterly results. It was not a great result overall. While revenues of JP¥200b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 11% to hit JP¥544 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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After the latest results, the 14 analysts covering SMC are now predicting revenues of JP¥833.3b in 2026. If met, this would reflect a satisfactory 5.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 12% to JP¥2,506. Before this earnings report, the analysts had been forecasting revenues of JP¥834.6b and earnings per share (EPS) of JP¥2,558 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

See our latest analysis for SMC

The consensus price target held steady at JP¥59,357, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic SMC analyst has a price target of JP¥68,000 per share, while the most pessimistic values it at JP¥49,800. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of SMC'shistorical trends, as the 7.5% annualised revenue growth to the end of 2026 is roughly in line with the 8.1% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.7% per year. So it's pretty clear that SMC is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for SMC. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at JP¥59,357, 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 SMC. Long-term earnings power is much more important than next year's profits. We have forecasts for SMC going out to 2028, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for SMC that you need to take into consideration.

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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.