Analysts Have Made A Financial Statement On Sumco Corporation's (TSE:3436) Annual Report

Shareholders of Sumco Corporation (TSE:3436) will be pleased this week, given that the stock price is up 14% to JP¥1,237 following its latest yearly results. It looks like the results were a bit of a negative overall. While revenues of JP¥397b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.8% to hit JP¥56.84 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Sumco

Taking into account the latest results, the most recent consensus for Sumco from 16 analysts is for revenues of JP¥415.6b in 2025. If met, it would imply an okay 4.8% increase on its revenue over the past 12 months. Statutory earnings per share are expected to dive 61% to JP¥22.01 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥435.1b and earnings per share (EPS) of JP¥22.49 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The analysts made no major changes to their price target of JP¥1,646, suggesting the downgrades are not expected to have a long-term impact on Sumco's valuation. 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. The most optimistic Sumco analyst has a price target of JP¥2,900 per share, while the most pessimistic values it at JP¥1,100. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sumco's past performance and to peers in the same industry. We would highlight that Sumco's revenue growth is expected to slow, with the forecast 4.8% annualised growth rate until the end of 2025 being well below the historical 9.3% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.3% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Sumco.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sumco. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Sumco going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Sumco (1 can't be ignored!) that you need to take into consideration.

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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.