SMC Corporation (TSE:6273) Interim Results: Here's What Analysts Are Forecasting For This Year

The half-yearly results for SMC Corporation (TSE:6273) were released last week, making it a good time to revisit its performance. SMC reported in line with analyst predictions, delivering revenues of JP¥395b and statutory earnings per share of JP¥2,767, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for SMC

Taking into account the latest results, the consensus forecast from SMC's 14 analysts is for revenues of JP¥816.4b in 2025. This reflects a modest 4.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 6.6% to JP¥2,703. In the lead-up to this report, the analysts had been modelling revenues of JP¥828.5b and earnings per share (EPS) of JP¥2,958 in 2025. 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 consensus price target held steady at JP¥80,996, 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. There are some variant perceptions on SMC, with the most bullish analyst valuing it at JP¥95,000 and the most bearish at JP¥65,000 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 SMC shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 10% growth on an annualised basis. That is in line with its 10% 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 4.8% per year. So although SMC is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider 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¥80,996, 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 2027, and you can see them free on our platform here.

You can also see our analysis of SMC's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.