Analysts made a financial statement on the third quarter report of Sumitomo Chemical India Limited (NSE: SUMICHEM)


Sumitomo Chemical India Limited (NSE: SUMICHEM) Shareholders are probably feeling a bit disappointed, as its shares fell 2.0% to 308 yen the week after its latest third quarter results. The results were roughly in line with estimates, with revenues of 5.6 billion yen and statutory earnings per share of 4.10 yen. Analysts usually update their forecasts with each earnings report, and we can judge from their estimates whether their view of the business has changed or if there are new concerns to consider. So we’ve collected the latest post-profit statutory consensus estimates to see what might be in store for next year.

Check out our latest review for Sumitomo Chemical India

NSEI: SUMICHEM Profit and Revenue Growth February 10, 2021

Based on the latest results, the current consensus of seven analysts at Sumitomo Chemical India is forecasting revenue of 29.6 billion yen in 2022, which would reflect a significant 16% increase in sales in the past 12 months. . Statutory earnings per share are expected to increase 17% to 7.35. Prior to this report’s writing, analysts had modeled revenues of 30.5 billion yen and earnings per share (EPS) of 7.42 yen in 2022. So it appears that analysts have become a little less optimistic after the latest earnings announcement, with expected revenue falling even as the company is expected to maintain EPS.

The average price target has remained stable at 310, although revenue estimates have declined; probably suggesting that analysts place a higher value on earnings. Sticking to a single price target can be unwise, however, as the consensus target is actually the average of analysts’ price targets. As a result, some investors like to look at the range of estimates to see if there are any differing opinions on the valuation of the company. Sumitomo Chemical India’s most bullish analyst has a price target of 343 per share, while the most pessimistic puts it at 269. This is a very narrow range of estimates, implying either that Sumitomo Chemical India is an easy company to value, or – more likely – analysts are relying heavily on some key assumptions.

Looking at the big picture now, one of the ways we can understand these forecasts is to compare them to past performance and industry growth estimates. It is clear from the latest estimates that the growth rate of Sumitomo Chemical India is expected to accelerate significantly, with a revenue growth forecast of 16% significantly faster than its historic growth of 9.7% per year over the years. last three years. Compare that with other companies in the same industry, which are expected to increase their revenues by 16% next year. Considering the expected acceleration in revenues, it is quite clear that Sumitomo Chemical India is expected to grow at roughly the same rate as the industry as a whole.

The bottom line

The most obvious conclusion is that there has been no major change in the outlook for the company lately, with analysts keeping their earnings forecasts stable, in line with previous estimates. They also lowered their revenue estimates, although, as we saw earlier, the expected growth is only expected to be about the same as that of the industry as a whole. That said, profits are more important to the long-term value of the business. There has been no real change to the consensus price target, suggesting that the intrinsic value of the company has not undergone any major changes with the latest estimates.

With this in mind, we still believe that the long-term trajectory of the company is much more important for investors to consider. We have estimates – from several analysts at Sumitomo Chemical India – up to 2023, and you can see them for free on our platform here.

We also provide an overview of Sumitomo Chemical India’s board and CEO compensation and length of time with the company, and whether any insiders bought the shares, here.

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