Results: Sumitomo Realty & Development Co., Ltd. Beat Earnings Expectations And Analysts Now Have New Forecasts

As you might know, Sumitomo Realty & Development Co., Ltd. (TSE:8830) just kicked off its latest first-quarter results with some very strong numbers. Sumitomo Realty & Development delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting JP¥316b-18% above indicated-andJP¥157-39% above forecasts- respectively The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Sumitomo Realty & Development

After the latest results, the consensus from Sumitomo Realty & Development's ten analysts is for revenues of JP¥1.00t in 2025, which would reflect a discernible 2.7% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to decrease 2.1% to JP¥403 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥1.01t and earnings per share (EPS) of JP¥403 in 2025. 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.

There were no changes to revenue or earnings estimates or the price target of JP¥5,914, suggesting that the company has met expectations in its recent result. 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. 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¥4,760. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past five years, revenues have declined around 0.9% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 3.6% decline in revenue until the end of 2025. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.2% per year. So while a broad number of companies are forecast to grow, unfortunately Sumitomo Realty & Development is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share 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 Realty & Development'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 Realty & Development. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Sumitomo Realty & Development going out to 2027, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Sumitomo Realty & Development you should know about.

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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.