Sumitomo Chemical Co Ltd (JP:4005)
:4005
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Sumitomo Chemical Co
(4005)
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Rating:54Neutral
Price Target:
¥566.00
▲(18.53% Upside)
Action:Reiterated
Date:06/14/26
The score is driven primarily by improving financial performance (post-2024 recovery in profitability and cash flow) but held back by elevated leverage and inconsistent revenue. Valuation is moderately supportive, while technicals are mixed with weaker near-term momentum despite longer-term trend support.
Positive Factors
Diversified business portfolio
Sumitomo Chemical’s broad portfolio across petrochemicals, functional materials, IT-related chemicals, agricultural chemicals and pharmaceuticals reduces single-market exposure. This structural diversification cushions cyclical swings, enables cross-market technology transfer, and supports more stable multi-year revenue streams.
Negative Factors
Elevated leverage level
Net debt materially exceeding equity leaves the company exposed to higher interest burden and less room to maneuver in downturns. In the cyclical chemicals sector this constrains margin recovery and capital allocation choices, increasing sensitivity to commodity and demand shocks over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified business portfolio
Sumitomo Chemical’s broad portfolio across petrochemicals, functional materials, IT-related chemicals, agricultural chemicals and pharmaceuticals reduces single-market exposure. This structural diversification cushions cyclical swings, enables cross-market technology transfer, and supports more stable multi-year revenue streams.
Read all positive factors
Sumitomo Chemical Co (4005) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥888.81B
Dividend Yield2.68%
Average Volume (3M)8.80M
Price to Earnings (P/E)15.1
Beta (1Y)0.88
Revenue Growth-10.66%
EPS Growth57.43%
CountryJP
Employees32,161
SectorBasic Materials
Sector Strength58
IndustryChemicals
Share Statistics
EPS (TTM)37.14
Shares Outstanding1,657,914,400
10 Day Avg. Volume7,938,570
30 Day Avg. Volume8,803,416
Financial Highlights & Ratios
PEG Ratio0.23
Price to Book (P/B)0.81
Price to Sales (P/S)0.35
P/FCF Ratio7.24
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥850.00Price Target Upside78.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)51.77
Revenue Forecast (FY)¥2.45T
Sumitomo Chemical Co Business Overview & Revenue Model
Company Description
Sumitomo Chemical Company, Limited is a global enterprise active across diverse sectors, including petrochemicals and plastics, advanced energy and functional materials, specialized IT-related chemicals, health and agricultural sciences, pharmaceu...
How the Company Makes Money
Sumitomo Chemical makes money primarily by manufacturing and selling chemical products and related materials to industrial and end-market customers worldwide. Its revenue model is largely volume- and price-driven, with earnings influenced by produ...
Sumitomo Chemical Co Earnings Call Summary
Earnings Call Date:Feb 03, 2026
(Q3-2025)
| % Change Since: |
Next Earnings Date:Jul 31, 2026
Earnings Call Sentiment Positive
The call presented materially stronger profitability and earnings momentum (notably a large YoY increase in core operating income and net income, improved D/E and an increased dividend), driven by Sumitomo Pharma performance and gains/divestitures in Essential & Green Materials. However, these positives are tempered by a significant YoY decline in sales revenue, deterioration in free cash flow versus prior year, expected concentrated nonrecurring losses in Q4 (impairments/restructuring), segment weakness (ICT & Mobility) and ongoing commodity and regional headwinds. On balance, the improvements in core profitability, upgraded guidance and balance sheet metrics outweigh the lowlights, though risks remain for Q4 and commodity‑sensitive businesses.Positive Updates
Sharp Increase in Core Operating Income
Core operating income for Q3 was JPY 186.8 billion, up JPY 126.8 billion year‑on‑year — an increase of approximately 211% — driven by improvements across Sumitomo Pharma and Essential & Green Materials and gains on business divestitures.
Negative Updates
Material Sales Revenue Decline
Consolidated Q3 sales revenue was JPY 1.7063 trillion, down JPY 198.5 billion YoY — a decline of roughly 10.4%. Sales decreased in all segments except Sumitomo Pharma; headwinds included lower sales prices and a large volume decline driven by business divestitures, plant maintenance and reduced shipments.
Read all updates
Q3-2025 Updates
Positive
Negative
Sharp Increase in Core Operating Income
Core operating income for Q3 was JPY 186.8 billion, up JPY 126.8 billion year‑on‑year — an increase of approximately 211% — driven by improvements across Sumitomo Pharma and Essential & Green Materials and gains on business divestitures.
Read all positive updates
Company Guidance
Management nudged FY2025 guidance higher: sales are forecast at ¥2.3 trillion (up ¥10 billion vs the November plan), core operating income ¥200 billion (up ¥15 billion vs November), and net income attributable to owners ¥55 billion (up ¥1.5 billion vs November; up ¥10 billion year‑on‑year). Management said recurring profit excluding divestment gains improved from ~¥80 billion last year to ~¥120 billion this year, lifted ICT & Mobility guidance by ¥2 billion, increased others/company‑wide expenses by ¥13 billion, and warned that non‑recurring losses will be concentrated in Q4. The year‑end dividend was raised to ¥7.5 (annual ¥13.5, +¥4.5 vs prior year; payout ratio ≈40%). Assumptions cited include an illustrative Q3 USD/JPY ~148.71 and naphtha ~¥65,000/kl.Sumitomo Chemical Co Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
49
Neutral
Cash Flow
57
Neutral
| Breakdown | Mar 2026 | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.33T | 2.61T | 2.45T | 2.90T | 2.77T |
| Gross Profit | 668.27B | 675.79B | 445.78B | 762.12B | 820.50B |
| EBITDA | 300.91B | 228.50B | -275.08B | 192.28B | 430.86B |
| Net Income | 60.95B | 38.59B | -311.84B | 6.99B | 162.13B |
Balance Sheet | |||||
| Total Assets | 3.41T | 3.44T | 3.93T | 4.17T | 4.31T |
| Cash, Cash Equivalents and Short-Term Investments | 208.59B | 209.84B | 217.45B | 305.84B | 365.43B |
| Total Debt | 1.15T | 1.37T | 1.66T | 1.55T | 1.44T |
| Total Liabilities | 2.17T | 2.37T | 2.77T | 2.68T | 2.61T |
| Stockholders Equity | 1.01T | 900.79B | 965.75B | 1.17T | 1.22T |
Cash Flow | |||||
| Free Cash Flow | 113.19B | 102.56B | -204.19B | -31.96B | 64.25B |
| Operating Cash Flow | 234.76B | 233.03B | -51.32B | 111.62B | 171.72B |
| Investing Cash Flow | -74.82B | 79.90B | -112.24B | -218.48B | -119.42B |
| Financing Cash Flow | -199.07B | -295.45B | 49.25B | 20.57B | -77.39B |
Sumitomo Chemical Co Technical Analysis
Neutral
477.50
Price Trends
554.44
Negative
532.46
Positive
492.88
Positive
Market Momentum
-0.05
Positive
42.16
Neutral
54.51
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 576.84, below the 50-day MA of 554.44, and below the 200-day MA of 492.88, indicating a neutral trend. The MACD of -0.05 indicates Positive momentum. The RSI at 42.16 is Neutral, neither overbought nor oversold. The STOCH value of 54.51 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | ¥14.43T | 29.11 | 11.19% | 2.17% | 0.50% | -6.24% | |
66 Neutral | ¥2.44T | 15.24 | 8.29% | 2.89% | 1.22% | 19.36% | |
64 Neutral | ¥945.24B | 22.63 | 4.79% | 4.21% | -4.09% | -27.31% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | ¥3.33T | 93.75 | 4.42% | 1.00% | -3.97% | -4.31% | |
54 Neutral | ¥888.81B | 15.07 | 8.79% | 2.68% | -10.66% | 57.43% | |
53 Neutral | ¥1.45T | 131.06 | 1.09% | 3.50% | -15.96% | -74.31% |
* Basic Materials Sector Average
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Sumitomo Chemical Co Corporate Events
Sumitomo Chemical Unit Taoka Chemical Lifts Earnings on Strong Resin Raw Material Sales
May 15, 2026
Sumitomo Chemical said its consolidated subsidiary Taoka Chemical Co., Ltd. posted higher non-consolidated results for the fiscal year ended March 31, 2026, compared with the prior year. The company emphasized that the impact of Taoka ChemicalR...
Sumitomo Chemical Profits Rebound Despite Lower Sales, Dividend Raised
May 14, 2026
Sumitomo Chemical reported a 10.7% decline in fiscal 2025 sales revenue to ¥2.33 trillion, but core operating income jumped 48.3% to ¥208.4 billion, while operating income fell 21.4% to ¥151.7 billion. Net income attributable to own...
Sumitomo Chemical Reverses Rabigh Share Write-down With No Impact on Group Earnings
May 14, 2026
Sumitomo Chemical Co., Ltd. reported that an extraordinary loss previously booked on a write-down of its investment in Class A ordinary shares of Rabigh Refining and Petrochemical Company in the third quarter of FY2025 has been reversed in its non...
Sumitomo Chemical Books ¥12.9 Billion FX Gain in Q4 FY2025
May 14, 2026
Sumitomo Chemical Co., Ltd. reported a finance income boost in the fourth quarter of fiscal 2025, driven by a foreign exchange gain of ¥12.87 billion from January 1 to March 31, 2026. The gain mainly stems from the revaluation of assets and l...
Sumitomo Chemical to Reclassify Capital Reserves Ahead of Koei Chemical Takeover
May 13, 2026
Sumitomo Chemical has approved a move to reduce the capital reserves that will arise from its planned share exchange to make subsidiary Koei Chemical a wholly owned unit, transferring the entire increase to other capital surplus instead. The board...
Sumitomo Pharma Profit Jumps on U.S. Asset Transfer and Asian Stake Sale
May 13, 2026
Sumitomo Chemical reported that its consolidated subsidiary Sumitomo Pharma Co., Ltd. posted sharp year-on-year gains in non-consolidated results for the fiscal year ended March 31, 2026, driven by an 82.9% rise in net sales to ¥249.5 billion...
Sumitomo Chemical to Take Koei Chemical Private via Simplified Share Exchange
May 13, 2026
Sumitomo Chemical and Koei Chemical have agreed to a share exchange that will make Koei Chemical a wholly owned subsidiary of Sumitomo Chemical, with Sumitomo as the parent company in a simplified share exchange and Koei seeking shareholder approv...
Sumitomo Pharma to Raise Capital via Major Share Offering While Remaining Sumitomo Chemical Subsidiary
Apr 8, 2026
Sumitomo Chemical’s consolidated subsidiary Sumitomo Pharma has resolved to issue new shares through a public offering, following a previously filed shelf registration, as part of a capital-raising initiative. The company plans to offer up t...
Sumitomo Chemical Moves Ahead With Polyolefin Business Integration With Prime Polymer
Apr 1, 2026
Sumitomo Chemical has signed an absorption-type company split agreement with Prime Polymer to transfer its Japanese polypropylene and linear low-density polyethylene businesses in the first phase of a previously announced polyolefin integration. U...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.