Sumitomo Pharma Co., Ltd. Just Recorded A 72% EPS Beat: Here's What Analysts Are Forecasting Next

A week ago, Sumitomo Pharma Co., Ltd. (TSE:4506) came out with a strong set of full-year numbers that could potentially lead to a re-rate of the stock. The company beat forecasts, with revenue of JP¥399b, some 7.1% above estimates, and statutory earnings per share (EPS) coming in at JP¥59.49, 72% 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. 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 Pharma's eight analysts is for revenues of JP¥373.4b in 2026, which would reflect a discernible 6.4% decline in revenue compared to the last year of performance. Statutory earnings per share are predicted to leap 24% to JP¥73.77. In the lead-up to this report, the analysts had been modelling revenues of JP¥373.7b and earnings per share (EPS) of JP¥74.24 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

See our latest analysis for Sumitomo Pharma

The analysts reconfirmed their price target of JP¥664, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Sumitomo Pharma, with the most bullish analyst valuing it at JP¥1,200 and the most bearish at JP¥410 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would also point out that the forecast 6.4% annualised revenue decline to the end of 2026 is better than the historical trend, which saw revenues shrink 8.4% annually 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 revenue grow 3.7% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Sumitomo Pharma to suffer worse than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. 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. The consensus price target held steady at JP¥664, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Sumitomo Pharma going out to 2028, and you can see them free on our platform here.

Even so, be aware that Sumitomo Pharma is showing 4 warning signs in our investment analysis , and 3 of those are a bit unpleasant...

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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.