Sumitomo Bakelite Company Limited Beat Revenue Forecasts By 14%: Here's What Analysts Are Forecasting Next
Shareholders will be ecstatic, with their stake up 31% over the past week following Sumitomo Bakelite Company Limited's (TSE:4203) latest first-quarter results. Sumitomo Bakelite beat revenue forecasts by a solid 14% to hit JP¥95b. Statutory earnings per share came in at JP¥320, in line with expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sumitomo Bakelite after the latest results.
Taking into account the latest results, the consensus forecast from Sumitomo Bakelite's seven analysts is for revenues of JP¥355.8b in 2027. This reflects a reasonable 5.4% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be JP¥360, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of JP¥352.1b and earnings per share (EPS) of JP¥346 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
See our latest analysis for Sumitomo Bakelite
The consensus price target was unchanged at JP¥7,600, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Sumitomo Bakelite, with the most bullish analyst valuing it at JP¥10,000 and the most bearish at JP¥5,700 per share. 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.
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. The analysts are definitely expecting Sumitomo Bakelite's growth to accelerate, with the forecast 7.3% annualised growth to the end of 2027 ranking favourably alongside historical growth of 5.4% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Sumitomo Bakelite is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Sumitomo Bakelite's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at JP¥7,600, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Sumitomo Bakelite analysts - going out to 2029, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Sumitomo Bakelite that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.