Earnings Miss: Sanyo Chemical Industries, Ltd. Missed EPS By 9.8% And Analysts Are Revising Their Forecasts

It's been a good week for Sanyo Chemical Industries, Ltd. (TSE:4471) shareholders, because the company has just released its latest yearly results, and the shares gained 3.2% to JP¥3,755. Revenues of JP¥142b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at JP¥188, missing estimates by 9.8%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the recent earnings report, the consensus from dual analysts covering Sanyo Chemical Industries is for revenues of JP¥130.0b in 2026. This implies an uneasy 8.6% decline in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 24% to JP¥233. In the lead-up to this report, the analysts had been modelling revenues of JP¥136.8b and earnings per share (EPS) of JP¥299 in 2026. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

Check out our latest analysis for Sanyo Chemical Industries

The consensus price target fell 5.4% to JP¥4,350, with the weaker earnings outlook clearly leading valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sanyo Chemical Industries' past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 8.6% annualised decline to the end of 2026. That is a notable change from historical growth of 1.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.6% annually for the foreseeable future. It's pretty clear that Sanyo Chemical Industries' revenues are expected to perform substantially worse than the wider industry.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2028, which can be seen for free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Sanyo Chemical Industries 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.