Sumitomo Chemical Co (4005) AI Stock Analysis

• Market Cap: $555.02B
• Dividend Yield: 2.16%
• Average Volume (3M): 9.72M
• Price to Earnings (P/E): 14.3
• Beta (1Y): 0.66
• Revenue Growth: 6.51%
• EPS Growth: N/A
• Country: JP
• Employees: 32,161
• Sector: Basic Materials
• Sector Strength: 69
• Industry: Chemicals
• EPS (TTM): 6.12
• Shares Outstanding: 1,657,217,700
• 10 Day Avg. Volume: 7,313,400
• 30 Day Avg. Volume: 9,717,193
• PEG Ratio: -0.32
• Price to Book (P/B): 0.62
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.19
• 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: $360.12
• Price Target Upside: 7.08% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 62 Neutral
• Price Target: ¥362.00 ▲(7.64%Upside)

Sumitomo Chemical's overall score reflects moderate financial performance with recent improvements in cash flow, reasonable valuation, and positive technical indicators. The earnings call indicates a recovery, but future revenue and expense challenges limit upside potential.

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 Co. generates revenue through its diversified portfolio of chemical products and solutions. The company operates in five major business segments: Petrochemicals & Plastics, Energy & Functional Materials, IT-related Chemicals, Health & Crop Sciences, and Pharmaceuticals. Each segment contributes to the company's earnings through the sale of products such as petrochemical raw materials, agricultural chemicals, electronic materials, and active pharmaceutical ingredients. Sumitomo Chemical also benefits from strategic partnerships and joint ventures, enhancing its market reach and technological capabilities. The company's focus on research and development, along with its commitment to innovation and sustainability, plays a crucial role in driving its profitability and competitive advantage in the global market.

Sumitomo Chemical Co Financial Statement Overview

Summary

Sumitomo Chemical faces challenges with declining revenue and profitability, evidenced by negative net income and margins. Despite improved cash flow in the TTM period, high leverage and reduced equity pose risks. The company needs to enhance operational efficiency to stabilize and improve its financial health.

Income Statement

The company's revenue shows a declining trend with a TTM revenue decrease of 12.1% from the previous year. Gross profit margin dropped to 26.4% in the TTM period from a high of 31.5% in 2022. The net profit margin is negative at -1.0% in TTM, indicating profitability challenges. EBIT and EBITDA margins are negative, reflecting operating difficulties.

Balance Sheet

The debt-to-equity ratio has increased slightly over the years, standing at 1.52 in TTM, indicating moderate leverage. Stockholders' equity decreased in recent periods, reflected in a reduced equity ratio of 25.4% in TTM. The return on equity has turned negative, which poses a risk to investors.

Cash Flow

The TTM period shows positive free cash flow of ¥81.4 billion, an improvement from the negative free cash flow in previous years. However, the operating cash flow to net income ratio is negative due to negative net income. This indicates a reliance on non-operating activities to generate cash.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
2.54T	2.45T	2.90T	2.77T	2.29T	2.23T
	Gross Profit
624.35B	499.69B	820.93B	873.86B	771.20B	706.76B
	EBIT
-245.87B	-387.43B	-30.98B	215.00B	137.12B	137.52B
	EBITDA
2.74B	-258.31B	199.08B	388.68B	306.28B	268.52B
	Net Income Common Stockholders
-173.48B	-311.84B	6.99B	162.13B	46.04B	30.93B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
217.45B	217.45B	337.08B	389.42B	373.73B	189.59B
	Total Assets
3.93T	3.93T	4.17T	4.31T	3.99T	3.65T
	Total Debt
1.67T	1.56T	1.46T	1.35T	1.35T	1.30T
	Net Debt
1.46T	1.35T	1.16T	985.04B	990.15B	1.12T
	Total Liabilities
2.77T	2.77T	2.68T	2.61T	2.51T	2.26T
	Stockholders Equity
965.75B	965.75B	1.17T	1.22T	1.02T	922.34B
Cash Flow		Free Cash Flow
81.45B	-204.19B	-31.96B	64.25B	253.65B	-14.44B
	Operating Cash Flow
224.39B	-51.32B	111.62B	171.72B	374.46B	106.01B
	Investing Cash Flow
22.29B	-112.24B	-19.41B	-115.42B	-177.39B	-499.67B
	Financing Cash Flow
-253.54B	49.25B	-178.50B	-81.39B	-39.97B	373.54B

Sumitomo Chemical Co Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 336.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 336.3 is below the 20-day moving average (MA) of 343.39, below the 50-day MA of 337.51, and below the 200-day MA of 362.29, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 46.55 is Neutral, neither overbought nor oversold. The STOCH value of 48.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4005.

Sumitomo Chemical Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4005	62 Neutral	$555.02B	14.26	3.96%	2.16%	6.51%	―
Sector *	51 Neutral	$2.01B	-1.11	-21.16%	3.67%	2.69%	-30.65%
AHKSF		$9.49B	10.20	7.25%	3.59%	―	―
KURRF		$4.10B	28.68	2.92%	2.75%	―	―
MTLHF		$7.53B	25.33	2.49%	4.04%	―	―
NSC		€3.52B	13.38	18.55%	4.20%	―	―
SHECF		$63.23B	18.32	11.81%	2.17%	―	―

Sumitomo Chemical Co Corporate Events

Sumitomo Chemical Announces Leadership Change

Sumitomo Chemical Co., Ltd. has announced a change in its leadership, appointing Keigo Sasaki as the new Representative Director. This decision, aimed at strengthening the company’s management structure, will be finalized at the upcoming General Meeting of Shareholders and subsequent Board of Directors meeting.

The most recent analyst rating on (JP:4005) stock is a Hold with a Yen370.00 price target. To see the full list of analyst forecasts on Sumitomo Chemical Co stock, see the JP:4005 Stock Forecast page.

Sumitomo Chemical Proposes Amendments to Enhance Governance

Sumitomo Chemical Co., Ltd. has announced a proposal for partial amendments to its Articles of Incorporation, which will be discussed at the upcoming General Meeting of Shareholders on June 20, 2025. The proposed changes include transitioning to a company with an Audit and Supervisory Committee, establishing new provisions for directors and decision-making processes, and allowing for more flexible resolutions by the Board of Directors. These amendments aim to enhance the company’s governance structure and operational flexibility.

The most recent analyst rating on (JP:4005) stock is a Hold with a Yen370.00 price target. To see the full list of analyst forecasts on Sumitomo Chemical Co stock, see the JP:4005 Stock Forecast page.

Sumitomo Chemical Reports Impairment and Forex Losses in Q4 FY2024

Sumitomo Chemical Co., Ltd. announced significant impairment losses and finance expenses for the fourth quarter of FY2024. The impairment losses, totaling ¥20,802 million, were primarily due to decreased profitability in their advanced medical solutions and essential materials sectors, as well as the devaluation of patent rights. Additionally, a foreign exchange loss of ¥26,342 million was recorded, impacting the company’s financial results due to fluctuations in foreign currency valuations.

The most recent analyst rating on (JP:4005) stock is a Hold with a Yen370.00 price target. To see the full list of analyst forecasts on Sumitomo Chemical Co stock, see the JP:4005 Stock Forecast page.

Sumitomo Chemical Reports Strong FY 2024 Financial Results

Sumitomo Chemical Co. reported its consolidated financial results for the fiscal year 2024, highlighting a significant improvement in financial performance compared to the previous year. The company achieved a sales revenue of ¥2,606,281 million, marking a 6.5% increase from FY 2023, and a notable recovery in net income attributable to owners of the parent, which stood at ¥38,591 million. This positive financial outcome reflects the company’s strategic efforts to enhance its operational efficiency and market positioning, benefiting stakeholders and reinforcing its industry standing.

The most recent analyst rating on (JP:4005) stock is a Hold with a Yen370.00 price target. To see the full list of analyst forecasts on Sumitomo Chemical Co stock, see the JP:4005 Stock Forecast page.

Sumitomo Chemical Reports Financial Variances in Subsidiaries

Sumitomo Chemical Co. reported variances in the non-consolidated financial results of its subsidiaries for fiscal years 2024 and 2023. Sumitomo Pharma Co., Ltd. saw significant improvements in net sales and income due to increased sales in North America and China, alongside reduced expenses. Taoka Chemical Co., Ltd. experienced growth in sales and income driven by higher sales of resin raw materials and cost-cutting measures. The overall impact on Sumitomo Chemical’s consolidated financial forecast is considered immaterial.

The most recent analyst rating on (JP:4005) stock is a Hold with a Yen370.00 price target. To see the full list of analyst forecasts on Sumitomo Chemical Co stock, see the JP:4005 Stock Forecast page.

Sumitomo Chemical Revises Financial Forecast Upwards for FY 2025

Sumitomo Chemical has revised its financial forecast for the fiscal year ending March 31, 2025, reflecting improved performance across several segments. The company anticipates higher core operating income and net income due to increased sales in North America for its prostate cancer therapeutic agent and higher shipments of display-related materials. These adjustments indicate a positive outlook for the company’s financial health and strategic positioning in its industry.

Sumitomo Chemical’s Strategic Move in Asian Market

Sumitomo Chemical Co., Ltd. announced a strategic move involving its subsidiary, Sumitomo Pharma Co., Ltd., which plans to establish a new wholly-owned subsidiary to manage its Asian business. This business will undergo a simplified absorption-type company split, with 60% of the new company’s shares to be transferred to Marubeni Global Pharma Inc. The agreements are expected to strengthen Sumitomo’s financial foundation and leverage Marubeni’s global network for further growth, although the immediate financial impact is deemed immaterial.