Analysts Are Updating Their Sumitomo Forestry Co., Ltd. (TSE:1911) Estimates After Its Full-Year Results

Shareholders might have noticed that Sumitomo Forestry Co., Ltd. (TSE:1911) filed its annual result this time last week. The early response was not positive, with shares down 5.1% to JP¥4,919 in the past week. Results were roughly in line with estimates, with revenues of JP¥2.1t and statutory earnings per share of JP¥569. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Sumitomo Forestry

Taking into account the latest results, the consensus forecast from Sumitomo Forestry's six analysts is for revenues of JP¥2.31t in 2025. This reflects a notable 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 7.0% to JP¥609. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥2.28t and earnings per share (EPS) of JP¥624 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¥6,585, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Sumitomo Forestry at JP¥7,300 per share, while the most bearish prices it at JP¥6,050. This is a very narrow spread of estimates, implying either that Sumitomo Forestry is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. We can infer from the latest estimates that forecasts expect a continuation of Sumitomo Forestry'shistorical trends, as the 12% annualised revenue growth to the end of 2025 is roughly in line with the 12% 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 0.2% per year. So it's pretty clear that Sumitomo Forestry is forecast to grow substantially faster than its 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Sumitomo Forestry. Long-term earnings power is much more important than next year's profits. We have forecasts for Sumitomo Forestry going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Sumitomo Forestry you should know about.

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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.