Sumitomo Pharma Co., Ltd. Just Recorded A 593% EPS Beat: Here's What Analysts Are Forecasting Next

Sumitomo Pharma Co., Ltd. (TSE:4506) just released its quarterly report and things are looking bullish. Statutory earnings performance was extremely strong, with revenue of JP¥112b beating expectations by 24% and earnings per share (EPS) of JP¥135, an impressive 593%ahead of expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sumitomo Pharma after the latest results.

View our latest analysis for Sumitomo Pharma

Following last week's earnings report, Sumitomo Pharma's eight analysts are forecasting 2026 revenues to be JP¥369.7b, approximately in line with the last 12 months. Sumitomo Pharma is also expected to turn profitable, with statutory earnings of JP¥36.15 per share. Before this earnings report, the analysts had been forecasting revenues of JP¥365.2b and earnings per share (EPS) of JP¥33.79 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 5.0% to JP¥574, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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 Sumitomo Pharma, with the most bullish analyst valuing it at JP¥900 and the most bearish at JP¥370 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. We would also point out that the forecast 0.6% annualised revenue decline to the end of 2026 is better than the historical trend, which saw revenues shrink 7.4% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 4.4% annually. So while a broad number of companies are forecast to grow, unfortunately Sumitomo Pharma is expected to see its revenue affected worse than other companies in the 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 Pharma 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 Pharma's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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

Before you take the next step you should know about the 1 warning sign for Sumitomo Pharma 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.