Earnings Miss: Sumitomo Realty & Development Co., Ltd. Missed EPS By 8.7% And Analysts Are Revising Their Forecasts

Sumitomo Realty & Development Co., Ltd. (TSE:8830) shareholders are probably feeling a little disappointed, since its shares fell 2.5% to JP¥5,255 in the week after its latest quarterly results. Revenues of JP¥243b beat forecasts by 12%, although statutory earnings per share disappointed slightly, coming in 8.7% below expectations at JP¥78.63. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Sumitomo Realty & Development

Taking into account the latest results, Sumitomo Realty & Development's eleven analysts currently expect revenues in 2026 to be JP¥1.04t, approximately in line with the last 12 months. Per-share earnings are expected to climb 13% to JP¥428. Before this earnings report, the analysts had been forecasting revenues of JP¥1.04t and earnings per share (EPS) of JP¥425 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of JP¥5,691, suggesting that the company has met expectations in its recent result. 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. The most optimistic Sumitomo Realty & Development analyst has a price target of JP¥7,420 per share, while the most pessimistic values it at JP¥4,330. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. It's clear from the latest estimates that Sumitomo Realty & Development's rate of growth is expected to accelerate meaningfully, with the forecast 1.2% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 0.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 4.0% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Sumitomo Realty & Development is expected to grow slower 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at JP¥5,691, 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 Realty & Development going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Sumitomo Realty & Development has 1 warning sign we think you should be aware of.

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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.