Results: Sumco Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

Sumco Corporation (TSE:3436) shareholders are probably feeling a little disappointed, since its shares fell 2.7% to JP¥974 in the week after its latest quarterly results. It looks like a credible result overall - although revenues of JP¥102b were what the analysts expected, Sumco surprised by delivering a (statutory) profit of JP¥8.71 per share, an impressive 67% above what was forecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

We've discovered 4 warning signs about Sumco. View them for free.

After the latest results, the 17 analysts covering Sumco are now predicting revenues of JP¥416.9b in 2025. If met, this would reflect a reasonable 2.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to tumble 76% to JP¥12.17 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥418.6b and earnings per share (EPS) of JP¥19.22 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

See our latest analysis for Sumco

The consensus price target held steady at JP¥1,542, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Sumco, with the most bullish analyst valuing it at JP¥2,900 and the most bearish at JP¥950 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. 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.

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. It's pretty clear that there is an expectation that Sumco's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.7% growth on an annualised basis. This is compared to a historical growth rate of 8.6% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Sumco is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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¥1,542, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Sumco going out to 2027, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 4 warning signs for Sumco (2 make us uncomfortable!) that you need to be mindful 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.