SMC Corporation Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
SMC Corporation (TSE:6273) just released its latest first-quarter results and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 11% higher than the analysts had forecast, at JP¥271b, while EPS were JP¥1,076 beating analyst models by 74%. 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.
Taking into account the latest results, the most recent consensus for SMC from 13 analysts is for revenues of JP¥1.02t in 2027. If met, it would imply a solid 12% increase on its revenue over the past 12 months. Statutory per share are forecast to be JP¥3,161, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of JP¥987.8b and earnings per share (EPS) of JP¥2,896 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
See our latest analysis for SMC
Despite these upgrades,the analysts have not made any major changes to their price target of JP¥82,400, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 SMC, with the most bullish analyst valuing it at JP¥100,000 and the most bearish at JP¥60,000 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the SMC's past performance and to peers in the same industry. It's clear from the latest estimates that SMC's rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 4.0% p.a. 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 6.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that SMC 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 SMC's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple SMC analysts - going out to 2029, 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 1 warning sign for SMC 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.