Analysts Have Just Cut Their Sompo Holdings, Inc. (TSE:8630) Revenue Estimates By 11%

The analysts covering Sompo Holdings, Inc. (TSE:8630) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the current consensus from Sompo Holdings' nine analysts is for revenues of JP¥5.0t in 2025 which - if met - would reflect a credible 2.1% increase on its sales over the past 12 months. Statutory earnings per share are supposed to tumble 38% to JP¥278 in the same period. Before this latest update, the analysts had been forecasting revenues of JP¥5.7t and earnings per share (EPS) of JP¥278 in 2025. Indeed we can see that the consensus opinion has undergone some fundamental changes following the recent consensus updates, with a substantial drop in revenues and some minor tweaks to earnings numbers.

View our latest analysis for Sompo Holdings

The consensus has reconfirmed its price target of JP¥3,947, showing that the analysts don't expect weaker sales expectationsthis year to have a material impact on Sompo Holdings' market value.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sompo Holdings' past performance and to peers in the same industry. We would highlight that Sompo Holdings' revenue growth is expected to slow, with the forecast 2.8% annualised growth rate until the end of 2025 being well below the historical 6.7% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Sompo Holdings.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Sompo Holdings' revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Sompo Holdings after today.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Sompo Holdings analysts - going out to 2027, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.