Sumitomo Chemical Co (4005) AI Stock Analysis

• Market Cap: ¥910.58B
• Dividend Yield: 2.68%
• Average Volume (3M): 8.80M
• Price to Earnings (P/E): 9.6
• Beta (1Y): 0.71
• Revenue Growth: -1.64%
• EPS Growth: N/A
• Country: JP
• Employees: 32,161
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): N/A
• Shares Outstanding: 1,657,914,400
• 10 Day Avg. Volume: 7,938,570
• 30 Day Avg. Volume: 8,803,416
• PEG Ratio: -0.14
• Price to Book (P/B): 0.66
• Price to Sales (P/S): 0.23
• P/FCF Ratio: 5.76
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: ¥588.00 ▲(23.14% Upside)
• Action: Reiterated Date: 02/05/26
• Date: Action: Reiterated 02/05/26

The score is driven primarily by recovering TTM profitability and cash flow, but constrained by weak/volatile revenue trends, elevated leverage, and subpar free-cash-flow conversion. Technicals are supportive but look overbought, while low P/E and a ~2.2% dividend add valuation support; earnings-call guidance improved but was tempered by weaker sales and cash-flow deterioration.

Positive Factors

Recovered Profitability and Positive Cash Flow

Sumitomo Chemical moved from a 2024 loss to positive TTM earnings with an ~11% operating margin and positive operating and free cash flow. This durable recovery improves the company's ability to fund capex, R&D, and operations across cycles, supporting long-term earnings resilience and reinvestment capacity.

Strength in Pharmaceuticals (Sumitomo Pharma)

Robust performance in Sumitomo Pharma, driven by key product sales and strategic divestitures, provides higher-margin, less cyclical earnings diversification. This segment's cash generation and product momentum can sustainably stabilize consolidated profits and offset commodity cyclicality in chemicals over the medium term.

Improving Balance Sheet Metrics

A meaningful reduction in interest-bearing debt alongside a sizable increase in equity materially improves financial flexibility. This durable de-risking gives management more room for strategic investment, targeted buybacks or debt paydown, and reduces refinancing pressure through varying market conditions.

Negative Factors

Declining and Volatile Revenue

Broad-based revenue contraction across most segments indicates weakening top-line scale and greater exposure to cyclical end markets. Sustained revenue weakness restricts margin leverage, reduces bargaining power with customers, and makes future profit improvements more reliant on cost cuts or portfolio shifts.

Elevated Leverage

A debt-heavy capital structure increases sensitivity to economic downturns and interest-rate movements, limiting strategic flexibility. Elevated leverage can constrain capital allocation choices (capex, M&A, dividends) and raises refinancing and covenant risks during cyclical troughs, affecting long-term stability.

Weak Free-Cash-Flow Conversion

Poor conversion of earnings to free cash flow and recent material deterioration signal earnings quality and operational cash risks. This undermines sustainable debt reduction, dividend support or organic investment, and suggests profits may not reliably translate into balance-sheet strength across cycles.

Sumitomo Chemical Co Business Overview & Revenue Model

Company Description

Sumitomo Chemical Company, Limited engages in the petrochemicals and plastics, energy and functional materials, IT-related chemicals, health and crop sciences, pharmaceuticals, and other businesses worldwide. Its Petrochemicals & Plastics segment offers synthetic resins, such as polyethylene, polypropylene, and polymethyl methacrylate resins; raw materials for synthetic fibers; and various industrial chemicals. The company's Energy & Functional Materials segment provides alumina and aluminum products used for energy products; polymer additives and rubber chemicals; synthetic rubber for tires, shoes, construction materials, and other applications; and engineering plastics and lithium-ion secondary battery materials for use in electronic components and next-generation vehicles. Its IT-Related Chemicals segment provides polarizing films, touch screen sensor panels, and color resists for LC and OLED displays; photoresists and high-purity chemicals for semiconductor manufacturing process; and compound semiconductor materials for antenna switches and other components of communication terminal equipment. The company's Health & Crop Sciences segment offers crop protection chemicals, fertilizers, feed additives, and household insecticides; active pharmaceutical ingredients and intermediates; and products to control infectious diseases. Its Pharmaceuticals segment provides prescription and diagnostic pharmaceuticals. The company's Others segment supplies electric power and steam; designs, constructs, and supervises chemical plants; provides transportation and warehousing services; and conducts physical property and environmental analysis. It has collaboration with Ginkgo Bioworks Announces Sumitomo Chemical to develop bio-based chemicals. Sumitomo Chemical Company, Limited was founded in 1913 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Sumitomo Chemical generates revenue through multiple key streams, primarily from the sale of its chemical products across different sectors. The company’s petrochemical division produces basic chemicals and plastics that are utilized in a wide range of applications, while its agricultural chemicals segment offers pesticides and fertilizers that support global food production. Additionally, the specialty chemicals division contributes to revenue through high-value products used in electronics and pharmaceuticals. Strategic partnerships with other companies, including joint ventures and collaborations for research and development, enhance its product offerings and market reach. Factors such as global demand for chemicals, innovations in sustainable practices, and expansion into emerging markets also play significant roles in bolstering its earnings.

Sumitomo Chemical Co Financial Statement Overview

Summary

TTM profitability and cash flow have rebounded meaningfully versus the 2024 loss, with ~11% operating margin and positive operating/free cash flow. However, revenue has fallen sharply, results have been volatile across recent years, leverage is elevated (debt-to-equity ~1.19 TTM), and free-cash-flow conversion is weak (FCF under half of net income).

Income Statement

Profitability has improved meaningfully versus the 2024 annual loss, with TTM (Trailing-Twelve-Months) returning to positive earnings and healthier operating profitability (about 11% operating margin and ~4% net margin). However, growth is a key weak spot: TTM revenue is down sharply (about -2.1x in the provided growth figure), and results have been volatile over the last few years (near-breakeven in 2023, large loss in 2024, recovery in 2025). Overall, margins are acceptable for a cyclical chemicals business but the earnings trajectory remains uneven.

Balance Sheet

Leverage is elevated, with debt running above equity (TTM debt-to-equity ~1.19; annual 2025 ~1.43), which reduces balance-sheet flexibility in a downturn. The positive is that equity has held up and improved versus 2025 annual levels, and returns on equity have recovered to roughly 10% on TTM after a deeply negative 2024. Still, the capital structure remains debt-heavy, making the company more sensitive to cyclical pressure and financing conditions.

Cash Flow

Cash generation is positive again: TTM operating cash flow and free cash flow are both solidly positive. That said, free cash flow is not converting strongly relative to earnings (TTM free cash flow is under half of net income), and TTM free cash flow has declined (~-16% growth). The prior year also showed very weak cash performance (negative operating and free cash flow in 2024), highlighting volatility through the cycle.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	2.41T	2.61T	2.45T	2.90T	2.77T	2.29T
Gross Profit	716.40B	725.48B	499.69B	820.93B	873.86B	771.20B
EBITDA	397.85B	321.64B	-258.31B	199.08B	388.68B	306.28B
Net Income	97.37B	38.59B	-311.84B	6.99B	162.13B	46.04B
Balance Sheet
Total Assets	3.51T	3.44T	3.93T	4.17T	4.31T	3.99T
Cash, Cash Equivalents and Short-Term Investments	214.77B	209.84B	217.45B	305.84B	389.42B	360.92B
Total Debt	1.22T	1.29T	1.56T	1.46T	1.35T	1.35T
Total Liabilities	2.24T	2.37T	2.77T	2.68T	2.61T	2.51T
Stockholders Equity	1.03T	900.79B	965.75B	1.17T	1.22T	1.02T
Cash Flow
Free Cash Flow	92.93B	102.56B	-204.19B	-31.96B	64.25B	253.65B
Operating Cash Flow	203.90B	233.03B	-51.32B	111.62B	171.72B	374.46B
Investing Cash Flow	-16.66B	79.90B	-112.24B	-19.41B	-115.42B	-177.39B
Financing Cash Flow	-254.34B	-295.45B	49.25B	-178.50B	-81.39B	-39.97B

Sumitomo Chemical Co Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 477.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4005, the sentiment is Neutral. The current price of 477.5 is below the 20-day moving average (MA) of 561.88, below the 50-day MA of 502.31, and above the 200-day MA of 434.20, indicating a neutral trend. The MACD of 18.19 indicates Positive momentum. The RSI at 55.17 is Neutral, neither overbought nor oversold. The STOCH value of 20.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4005.

Sumitomo Chemical Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4063	75 Outperform	¥12.48T	24.10	10.87%	2.17%	3.77%	0.35%
3407	68 Neutral	¥2.56T	15.94	7.48%	2.89%	3.55%	95.65%
4042	68 Neutral	¥865.05B	25.35	4.79%	4.21%	-1.21%	-27.21%
4188	66 Neutral	¥1.53T	17.55	1.09%	3.50%	-11.50%	25.86%
4005	65 Neutral	¥910.58B	9.58	8.79%	2.68%	-1.64%	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4004	58 Neutral	¥2.26T	74.33	1.67%	1.00%	-1.90%	-71.97%

Sumitomo Chemical Co Corporate Events

Sumitomo Chemical Books ¥13.3 Billion Extraordinary Loss on Rabigh Share Write-Down

Sumitomo Chemical will book an extraordinary loss of ¥13.36 billion in its non-consolidated results for the third quarter of FY2025 due to a write-down of its investment in Class A ordinary shares of Rabigh Refining and Petrochemical Company, following a substantial decline in the market price of those shares. The loss, calculated under the company’s reversal-based quarterly securities valuation method, may change depending on fourth-quarter market prices but will be fully eliminated at the consolidated level, meaning it will not affect Sumitomo Chemical’s consolidated financial performance, limiting direct impact on group-wide earnings and stakeholders focused on consolidated results.

The most recent analyst rating on (JP:4005) stock is a Hold with a Yen545.00 price target. To see the full list of analyst forecasts on Sumitomo Chemical Co stock, see the JP:4005 Stock Forecast page.

Sumitomo Chemical Books ¥15.9 Billion Equity-Method Loss on Rabigh Affiliate

Sumitomo Chemical Co., Ltd. reported a ¥15,873 million share of loss from investments accounted for using the equity method in the third quarter of FY2025, primarily stemming from a deterioration in the financial performance of its equity-method affiliate Rabigh Refining and Petrochemical Company. The company indicated that the impact of this loss on its overall operating results is reflected in its consolidated financial disclosures for the third quarter, highlighting the ongoing earnings sensitivity of Sumitomo Chemical to the performance of its overseas petrochemical affiliates.

The most recent analyst rating on (JP:4005) stock is a Hold with a Yen545.00 price target. To see the full list of analyst forecasts on Sumitomo Chemical Co stock, see the JP:4005 Stock Forecast page.

Sumitomo Chemical Lifts Full-Year Earnings Outlook and Ups Dividend on Stronger Semiconductor Demand

Sumitomo Chemical has raised its consolidated forecast for the fiscal year ending March 31, 2026, citing stronger-than-expected shipments of semiconductor processing materials in its ICT & Mobility Solutions segment and steady progress in business activities despite a challenging operating environment. The company now expects sales revenue of ¥2.3 trillion and core operating income of ¥200 billion, both above its previous projections, with operating income and net income attributable to owners of the parent also set to outperform earlier estimates. In line with the improved outlook and its policy of prioritizing stable shareholder returns, Sumitomo Chemical has lifted its projected full-year dividend from ¥12.00 to ¥13.50 per share, including an increased year-end payout, signaling management’s confidence in earnings momentum relative to the prior year’s lower dividend levels.

The most recent analyst rating on (JP:4005) stock is a Hold with a Yen545.00 price target. To see the full list of analyst forecasts on Sumitomo Chemical Co stock, see the JP:4005 Stock Forecast page.

Sumitomo Chemical Swings to Strong Profit in Q3, Lifts Full-Year Outlook and Dividend Forecast

For the third quarter of fiscal 2025, Sumitomo Chemical reported a 10.4% year-on-year decline in sales revenue to ¥1.71 trillion, but delivered a sharp turnaround in profitability, with core operating income more than tripling to ¥186.8 billion and net income attributable to owners of the parent surging to ¥87.4 billion from a loss a year earlier. The company’s equity ratio improved to 29.3% on total assets of ¥3.51 trillion, and it revised both its full-year fiscal 2025 guidance and dividend outlook, now forecasting a 11.8% decline in annual sales to ¥2.3 trillion but a 42.3% increase in core operating income to ¥200 billion and a 42.5% rise in net income to ¥55 billion, alongside a higher full-year dividend forecast of ¥13.50 per share, signaling strengthened earnings capacity and a more shareholder-friendly capital policy.

The most recent analyst rating on (JP:4005) stock is a Hold with a Yen545.00 price target. To see the full list of analyst forecasts on Sumitomo Chemical Co stock, see the JP:4005 Stock Forecast page.

Sumitomo Chemical Sets Share Exchange Ratio to Make Tanaka Chemical a Wholly Owned Unit

Sumitomo Chemical and Tanaka Chemical have finalized the share exchange ratio for a simplified share exchange that will make Tanaka Chemical a wholly owned subsidiary of Sumitomo Chemical. Under the agreed terms, Sumitomo Chemical will allot 0.87 of its common shares for each Tanaka Chemical share, delivering an expected 14,028,356 Sumitomo Chemical shares, all sourced from existing treasury stock. The ratio was derived by dividing a fixed value of 424 yen by the four-day average Sumitomo Chemical share price of 486 yen as of January 16, 2026, and may be adjusted slightly if Tanaka Chemical’s treasury share position changes before completion. The transaction structure, including cancellation of Tanaka Chemical treasury shares and cash settlement of fractional Sumitomo Chemical shares, is designed to streamline full integration of Tanaka Chemical into Sumitomo Chemical’s group, strengthening control and potentially enhancing operational and strategic coordination across their chemical businesses.

The most recent analyst rating on (JP:4005) stock is a Hold with a Yen511.00 price target. To see the full list of analyst forecasts on Sumitomo Chemical Co stock, see the JP:4005 Stock Forecast page.

Sumitomo Chemical to Fold Japan Polyolefin Operations into Prime Polymer, Take 20% Stake

Sumitomo Chemical has agreed to integrate its domestic polypropylene and linear low-density polyethylene businesses into Prime Polymer through a two-phase simple absorption-type company split, in exchange for a 20% equity stake in Prime Polymer, transforming the latter into a three-party joint venture with Mitsui Chemicals and Idemitsu Kosan. The move aims to address chronic oversupply and shrinking demand in Japan’s polyolefin market by consolidating operations, optimizing production in the Keiyo region, and pursuing annual cost savings of more than ¥8 billion, while bolstering competitiveness against imports and accelerating the development of high-performance, lower-environmental-impact plastics to support a “green chemical” business strategy; the transaction is subject to regulatory clearances but is expected to have only a limited impact on Sumitomo Chemical’s balance sheet and sales ratios.

The most recent analyst rating on (JP:4005) stock is a Hold with a Yen506.00 price target. To see the full list of analyst forecasts on Sumitomo Chemical Co stock, see the JP:4005 Stock Forecast page.