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Investing.com - Jefferies initiated coverage on Sumitomo Electric Industries Ltd (TYO:5802) with a Hold rating and a price target of JPY4,227.00 on Thursday.
The research firm expects Sumitomo Electric’s earnings to grow at a slower pace due to its heavy exposure to the automotive sector. Jefferies highlighted that geopolitical risks, including newly-introduced auto tariffs to the United States, could negatively impact the company’s wiring harnesses and other auto-related products.
While Jefferies anticipates growth in Sumitomo Electric’s telecom segment driven by increasing data center demand, it noted that the company’s relatively low exposure in this area compared to competitors Fujikura and Furukawa limits potential earnings contributions.
The firm projects that Sumitomo Electric’s fiscal year 2026 (ending March 2026) earnings will perform close to the company’s guidance, consistent with its first-quarter performance.
Sumitomo Electric Industries trades on the Tokyo Stock Exchange under the ticker 5802 and is also available to U.S. investors through its over-the-counter listing (OTC:SMTOY).
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