Sumitomo Chemical Company, Limited Just Beat EPS By 77%: Here's What Analysts Think Will Happen Next

Sumitomo Chemical Company, Limited (TSE:4005) shareholders are probably feeling a little disappointed, since its shares fell 7.5% to JP¥429 in the week after its latest half-yearly results. Revenues were JP¥1.1t, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at JP¥27.02, an impressive 77% ahead of estimates. 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.

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After the latest results, the consensus from Sumitomo Chemical Company's ten analysts is for revenues of JP¥2.34t in 2026, which would reflect a discernible 5.0% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to plunge 48% to JP¥26.90 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥2.35t and earnings per share (EPS) of JP¥25.96 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

View our latest analysis for Sumitomo Chemical Company

The consensus price target was unchanged at JP¥527, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Sumitomo Chemical Company at JP¥760 per share, while the most bearish prices it at JP¥415. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 would highlight that revenue is expected to reverse, with a forecast 9.7% annualised decline to the end of 2026. That is a notable change from historical growth of 0.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.1% per year. It's pretty clear that Sumitomo Chemical Company's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Sumitomo Chemical Company following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Sumitomo Chemical Company's revenue is expected to perform worse 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 Chemical Company. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Sumitomo Chemical Company analysts - going out to 2028, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Sumitomo Chemical Company (1 is concerning!) that we have uncovered.

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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.