Sumitomo Forestry Co (1911) AI Stock Analysis

• Market Cap: ¥1.03T
• Dividend Yield: 3.21%
• Average Volume (3M): 2.76M
• Price to Earnings (P/E): 9.7
• Beta (1Y): 1.23
• Revenue Growth: 10.17%
• EPS Growth: -19.40%
• Country: JP
• Employees: 26,741
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): 61.45
• Shares Outstanding: 618,555,800
• 10 Day Avg. Volume: 2,392,440
• 30 Day Avg. Volume: 2,756,773
• PEG Ratio: -0.13
• Price to Book (P/B): 0.98
• Price to Sales (P/S): 0.43
• P/FCF Ratio: 41.89
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 172.96
• Revenue Forecast (FY): ¥2.55T

• Rating: 64 Neutral
• Price Target: ¥1,767.00 ▲(11.91% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is primarily driven by solid but uneven financial performance: profitability remains positive and revenue has grown, but higher leverage, margin compression, and volatile cash flow reduce confidence. Valuation is a key positive (low P/E and a ~3.2% dividend yield). Technicals are mixed, with near-term weakness versus the 20-day average but longer-term support above the 200-day average.

Positive Factors

Revenue Growth

Sustained top-line growth through 2025 indicates expanding demand and execution across the company's integrated wood supply, materials distribution, and housing segments. A larger revenue base improves ability to absorb cyclical swings and funds reinvestment in core operations over the medium term.

Consistent Profitability

The business remains consistently profitable, providing a durable earnings foundation to support operations, dividend policy, and project funding. Even with margin pressure, ongoing positive profits underpin internal financing capacity and reduce reliance on external funding over multiple quarters.

Growing Equity & Asset Base

An expanding equity base and healthy asset growth strengthen the company’s capital structure, enabling larger project scale and investment in forestry or housing initiatives. Stronger balance-sheet equity improves resilience to shocks and supports longer-term strategic investments.

Negative Factors

Rising Leverage

A material increase in debt and higher debt-to-equity raises financial risk and interest burden, reducing flexibility to fund projects or weather a housing slowdown. Elevated leverage makes the firm more sensitive to rate moves and earnings volatility over the coming quarters.

Volatile Cash Generation

Inconsistent operating and free cash flows signal working-capital swings or lumpy project cash timing, weakening confidence in cash durability. Volatility limits capacity for steady capex, deleveraging, or shareholder returns without relying on external financing in some periods.

Margin Compression

Eroding margins despite revenue growth point to cost pressure or adverse sales mix that can persist if input costs or logistics stay elevated. Margin deterioration reduces earnings leverage and makes long-term profitability more dependent on successful cost controls or pricing power.

Sumitomo Forestry Co Business Overview & Revenue Model

Company Description

Sumitomo Forestry Co., Ltd. engages in the timber and building materials, housing and construction, overseas housing and real estate, environment and resources, and other businesses in Japan, the United States, and internationally. The company's Timber and Building Materials segment procures, manufactures, processes, and sells timber and building materials, such as interior materials, plywood, medium density fiberboard, particle board, laminated veneer lumber, and other timber and building materials; develops and produces building materials, including structural members, and special interior products; and sells housing materials. Its Housing and Construction segment is involved in the construction, maintenance, and renovation of detached houses and apartment buildings; lease, management, purchase, sale, and brokerage of real estate; and house exterior fixtures, urban greening works, CAD, site surveys, etc. The company's Overseas Housing and Real Estate segment sells specs home; constructs detached houses, etc.; and develops multi-family housing and commercial complexes, etc. Its Environment and Resources segment engages in the biomass power generation business and forestation, etc. The company's Other segment is involved in the private-pay elderly care facilities and insurance agency businesses; and contracted civil engineering/construction works, etc. The company also engages in the management of forest and golf courses; secondary processing and sale of aluminum sashes and exterior finishing products; processing industrial waste products; wholesale of electric power; supply and sale of wood chips; development of computer systems, etc.; landscaping for private residences, plant management and rental, equipment leasing, office services, staffing, training, business contracting, and home nursing care services; and production and sale of nursery compost, culture soil for gardening, etc. The company was founded in 1691 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Sumitomo Forestry generates revenue through multiple channels, primarily from its housing and construction businesses. These include the design, construction, and sale of residential properties, as well as the provision of housing-related services. The company also earns income from the sale of timber and building materials sourced from its own forests as well as from external suppliers. Additionally, Sumitomo Forestry has significant investments in real estate development, which contribute to its earnings. Its partnerships with various stakeholders in the forestry and construction sectors further enhance its revenue streams. The focus on sustainability and eco-friendly building practices has also positioned the company favorably in the market, attracting environmentally conscious consumers and businesses.

Sumitomo Forestry Co Financial Statement Overview

Summary

Financial quality is solid but not robust: revenue scaled over 2020–2025 and profitability remains positive, but 2025 showed margin compression and lower net income despite higher revenue. Balance sheet risk increased with a sharp rise in debt and higher leverage, and cash flow has been volatile with an FCF dip negative in 2024 and inconsistent cash conversion.

Income Statement

Revenue has scaled meaningfully over the period (2020 to 2025), with 2025 showing solid top-line growth. Profitability is positive but has softened recently: gross margin and operating margins in 2025 are lower than 2024, and net income declined year over year despite higher revenue, pointing to cost pressure and/or mix headwinds. Overall, the business remains consistently profitable, but margin compression and earnings volatility keep the score below the top tier.

Balance Sheet

The company has grown its equity base over time, which is supportive, but leverage has increased materially: total debt rose sharply into 2025 and the debt-to-equity level moved higher versus prior years. This adds financial risk and reduces flexibility if the housing cycle weakens. Asset growth is healthy, but the recent step-up in debt is the key watch item.

Cash Flow

Cash generation is the weakest area due to volatility. Free cash flow swung from strongly positive in 2023 to negative in 2024, then recovered to positive in 2025, suggesting uneven working-capital and/or investment demands. Cash conversion is also inconsistent, with operating cash flow and free cash flow representing a relatively small share of earnings in 2024–2025 versus 2023, which limits confidence in near-term cash durability.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.15T	2.27T	2.05T	1.73T	1.67T	1.39T
Gross Profit	516.35B	524.65B	502.95B	408.83B	392.97B	321.99B
EBITDA	227.38B	204.53B	236.12B	172.44B	211.80B	158.57B
Net Income	109.37B	106.67B	116.53B	102.48B	108.67B	87.17B
Balance Sheet
Total Assets	2.25T	2.57T	2.26T	1.81T	1.54T	1.31T
Cash, Cash Equivalents and Short-Term Investments	145.20B	185.41B	186.10B	182.23B	131.93B	143.26B
Total Debt	671.20B	769.47B	613.41B	423.87B	348.32B	302.76B
Total Liabilities	1.27T	1.44T	1.24T	989.42B	855.04B	774.14B
Stockholders Equity	878.28B	1.00T	920.42B	754.49B	627.61B	495.73B
Cash Flow
Free Cash Flow	0.00	23.46B	-42.35B	92.41B	18.61B	67.30B
Operating Cash Flow	0.00	94.67B	27.08B	125.30B	55.28B	91.58B
Investing Cash Flow	0.00	-131.42B	-135.10B	-109.09B	-52.38B	-40.25B
Financing Cash Flow	0.00	37.41B	133.22B	6.83B	-33.00B	-7.03B

Sumitomo Forestry Co Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1579.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1911, the sentiment is Neutral. The current price of 1579 is below the 20-day moving average (MA) of 1737.77, below the 50-day MA of 1676.10, and below the 200-day MA of 1589.63, indicating a neutral trend. The MACD of 2.58 indicates Positive momentum. The RSI at 45.93 is Neutral, neither overbought nor oversold. The STOCH value of 19.15 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:1911.

Sumitomo Forestry Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3291	74 Outperform	¥750.70B	13.83	5.12%	4.02%	0.20%	44.96%
1928	74 Outperform	¥2.49T	12.40	11.12%	4.17%	9.27%	-11.27%
1808	73 Outperform	¥888.99B	17.14	7.50%	2.92%	7.42%	-16.64%
8892	66 Neutral	¥109.20B	12.37	―	4.20%	27.02%	45.62%
1911	64 Neutral	¥1.03T	9.73	11.28%	3.21%	10.17%	-19.40%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
1419	56 Neutral	¥116.78B	47.87	―	5.49%	-16.48%	-77.63%

Sumitomo Forestry Co Corporate Events

Sumitomo Forestry to Issue Non-Dilutive Bond-Type Class Shares to Bolster Equity

Sumitomo Forestry plans to issue bond-type class shares that will be treated as equity under Japan’s Companies Act, allowing the entire issue amount to be booked as equity for accounting purposes and half treated as equity for rating purposes. These non-voting, non-convertible shares are designed to strengthen the company’s capital base without diluting common shareholders, and an application for listing on the Tokyo Stock Exchange Prime Market is planned.

The securities will carry a preferred, fixed dividend for about five years followed by a floating rate, will be senior to common share dividends, and will be cumulative so unpaid dividends roll forward. The company also retains a cash call option to acquire the shares in principle after five years at issue price plus unpaid dividends, offering flexibility in capital management and potentially appealing to investors seeking stable, hybrid-equity income instruments.

The most recent analyst rating on (JP:1911) stock is a Hold with a Yen1935.00 price target. To see the full list of analyst forecasts on Sumitomo Forestry Co stock, see the JP:1911 Stock Forecast page.

Sumitomo Forestry to Add Bond-Type Class Shares to Fund Overseas Growth Drive

Sumitomo Forestry plans to amend its Articles of Incorporation to introduce up to 10 classes of so-called Bond-Type Class Shares, enabling equity financing that avoids dilution of voting rights for existing common shareholders. The move aligns with its Mission TREEING 2030 strategy and Phase 2 medium-term plan, which emphasize aggressive yet financially sound growth, ongoing decarbonization, and expansion of wood-based construction and overseas housing operations.

The new Bond-Type Class Shares will carry preferred but non-participating dividends, no voting rights, and no conversion to common stock, limiting their impact on core metrics such as ROE and EPS for common shares. By strengthening its equity base while maintaining credit ratings and capital efficiency, Sumitomo Forestry aims to secure funding flexibility for M&A and other investments in overseas housing and real estate, particularly in the U.S. where it expects continued expansion of opportunities.

The board approved the proposal on February 13, 2026, and will seek shareholder approval for the Articles amendment at the 86th Ordinary General Meeting scheduled for March 27, 2026. If adopted, the framework will support the company’s multinational “WOOD CYCLE” value chain strategy and its long-term goal of enhancing sustainable corporate value for stakeholders across environmental, social and market dimensions.

The most recent analyst rating on (JP:1911) stock is a Hold with a Yen1935.00 price target. To see the full list of analyst forecasts on Sumitomo Forestry Co stock, see the JP:1911 Stock Forecast page.

Sumitomo Forestry to Acquire Tri Pointe Homes in Push to Become Top U.S. Builder

Sumitomo Forestry has agreed to acquire 100% of U.S. homebuilder Tri Pointe Homes through its subsidiary Sumitomo Forestry America, making Tri Pointe a consolidated and specified subsidiary once regulatory and shareholder approvals are secured. The deal will significantly enlarge the group’s net assets base and deepen its presence in the world’s largest wooden housing market.

The acquisition adds roughly 6,460 annual home deliveries across 13 states, boosting the group’s U.S. single-family output to about 18,000 units and positioning it among the top five U.S. builders. By gaining strong footholds in high-demand states such as California, Texas, and Arizona and linking Tri Pointe to its sawmill and prefabrication operations, Sumitomo Forestry aims to strengthen its wood-centric value chain, improve scale efficiencies, and advance its 2030 goal of supplying 23,000 U.S. homes annually.

Tri Pointe’s emphasis on a premium lifestyle brand and broad product lineup will diversify Sumitomo Forestry’s offerings and enhance its customer-centric positioning. The company also expects to leverage Tri Pointe’s experience as a listed U.S. operator to reinforce governance and management know-how, underpinning its ambition to solidify a national homebuilder platform in the United States.

The most recent analyst rating on (JP:1911) stock is a Hold with a Yen1935.00 price target. To see the full list of analyst forecasts on Sumitomo Forestry Co stock, see the JP:1911 Stock Forecast page.

Sumitomo Forestry Raises Year-End Dividend, Reinforces Shareholder Return Policy

Sumitomo Forestry has approved an increase in its year-end dividend for the fiscal year ended December 31, 2025, raising the planned payout from ¥25 to ¥28 per share, with a total dividend of ¥17.295 billion to be paid from retained earnings, subject to shareholder approval in March 2026. The move aligns with its Mission TREEING 2030 Phase 2 policy, which targets a dividend payout ratio of at least 30% of net income and a minimum annual dividend of ¥50 per share, signaling a commitment to stable and enhanced shareholder returns following recent earnings performance and a 3-for-1 stock split in 2025.

The most recent analyst rating on (JP:1911) stock is a Hold with a Yen1935.00 price target. To see the full list of analyst forecasts on Sumitomo Forestry Co stock, see the JP:1911 Stock Forecast page.

Sumitomo Forestry Grows Revenue but Sees Profit Decline, Cuts 2026 Dividend Outlook

Sumitomo Forestry reported consolidated net sales of ¥2.27 trillion for the fiscal year ended December 31, 2025, up 10.4% year on year, but operating income fell 13.3% to ¥168.7 billion and net income attributable to shareholders declined 8.5% to ¥106.7 billion, reflecting margin pressure despite top-line growth. Total assets rose to ¥2.57 trillion and shareholders’ equity increased, though the equity ratio edged down, while operating cash flow strengthened and the company maintained an active dividend policy, including a 2025 year-end payout and a reduced 2026 dividend forecast alongside guidance for further sales growth but lower profits.

The company also finalized provisional accounting for a prior business combination, which materially adjusted the allocation of acquisition costs and influenced its reported financial position. Management’s 2026 forecast points to a continued expansion in scale, with net sales expected to climb 14.2%, but anticipates further declines in operating and net income, suggesting a challenging earnings environment ahead for shareholders as the group balances growth investments, capital structure, and shareholder returns, including the impact of a three-for-one stock split executed in July 2025.

The most recent analyst rating on (JP:1911) stock is a Hold with a Yen1935.00 price target. To see the full list of analyst forecasts on Sumitomo Forestry Co stock, see the JP:1911 Stock Forecast page.

Sumitomo Forestry and Kumagai Gumi Trim Cross-Shareholdings While Deepening Strategic Alliance

Sumitomo Forestry Co., Ltd. and Kumagai Gumi Co., Ltd. announced a mutual reduction of their cross-shareholdings within their long-standing capital and business alliance, aiming to improve capital efficiency and enhance shareholder value while maintaining and further strengthening their cooperative relationship. Sumitomo Forestry will sell up to 11,473,400 shares of Kumagai Gumi via a secondary offering, including a possible over-allotment and greenshoe option, while Kumagai Gumi will sell 4,777,600 shares of Sumitomo Forestry through a block trade, with both transactions structured so that each company reduces its holdings on an equal and proportional basis. The alliance itself remains intact, with both firms committing to continued collaboration that combines Sumitomo Forestry’s expertise in wood-based, environmentally oriented construction with Kumagai Gumi’s civil engineering capabilities to support growth in infrastructure projects that harmonize with the natural environment. The impact on Sumitomo Forestry’s consolidated results is expected to be minor, whereas Kumagai Gumi anticipates recording an extraordinary gain from the sale of investment securities in the fourth quarter of the fiscal year ending March 31, 2026, signaling a balance between financial optimization and ongoing strategic partnership for both companies.

The most recent analyst rating on (JP:1911) stock is a Hold with a Yen1846.00 price target. To see the full list of analyst forecasts on Sumitomo Forestry Co stock, see the JP:1911 Stock Forecast page.

Sumitomo Forestry Rebrands Subsidiary to DRB Group Texas, LLC

Sumitomo Forestry Co., Ltd. announced a rebranding and status change for its subsidiary, Brightland Homes, Ltd., which will now be known as DRB Group Texas, LLC. Despite the change in name and status, the company will remain a consolidated subsidiary, and the impact on Sumitomo Forestry’s financial results is expected to be minor.

The most recent analyst rating on (JP:1911) stock is a Hold with a Yen1846.00 price target. To see the full list of analyst forecasts on Sumitomo Forestry Co stock, see the JP:1911 Stock Forecast page.