SMC Corporation Just Missed EPS By 17%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for SMC Corporation (TSE:6273), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. SMC missed earnings this time around, with JP¥195b revenue coming in 3.3% below what the analysts had modelled. Statutory earnings per share (EPS) of JP¥661 also fell short of expectations by 17%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for SMC

After the latest results, the 14 analysts covering SMC are now predicting revenues of JP¥860.9b in 2026. If met, this would reflect a decent 9.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 14% to JP¥2,894. In the lead-up to this report, the analysts had been modelling revenues of JP¥873.0b and earnings per share (EPS) of JP¥3,006 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.

The average price target fell 7.2% to JP¥69,725, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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 SMC, with the most bullish analyst valuing it at JP¥95,000 and the most bearish at JP¥53,500 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that SMC's revenue growth is expected to slow, with the forecast 7.7% annualised growth rate until the end of 2026 being well below the historical 9.9% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.5% per year. Even after the forecast slowdown in growth, it seems obvious that SMC is also expected to grow faster than the wider industry.

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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for SMC 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 SMC 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.