SMFG Stock Recent News

Sumitomo Mitsui Financial Group, a Japanese bank with over $2 trillion in assets, offers potential diversification due to its high exposure to Japan, but its lower than average dividend yield and fair valuation make it less attractive for investment. The bank has a conservative lending approach and a low-risk balance sheet, with a sizable equity portfolio of Japanese equities that it plans to reduce to decrease earnings volatility. Despite its stable profile and conservative risk culture, Sumitomo's financial performance has been relatively stable over the past few years due to low growth prospects. Its return on equity ratio is only 6.5%, a relatively low level of profitability.

Sumitomo Mitsui Financial Group has reported a 39.51% YoY increase in Q1 revenues, reaching $13.66bn, despite a 57.25% decline in net income. The bank's strategy focuses on becoming a leaner, streamlined business with a focus on digitalization and geographic expansion across Asia and the US. The bank is currently undervalued, with a net present value of $9.28 compared to its current price of $8.40, according to a discounted cash flow valuation. This undervaluation is also supported by Alpha Spread's intrinsic valuation, which calculates a base case fair value of $17.14. However, SMFG faces potential risks including shifts in domestic monetary policy, global economic slowdown, and recessionary pressures. Despite these challenges, the bank's transformation into a leaner business and geographic expansion strategy are expected to enable long-term margin expansion and scale accretion.

Investors looking for stocks in the Banks - Foreign sector might want to consider either Lloyds (LYG) or Sumitomo Mitsui (SMFG). But which of these two stocks presents investors with the better value opportunity right now?

Investors interested in Banks - Foreign stocks are likely familiar with Erste Group Bank AG (EBKDY) and Sumitomo Mitsui (SMFG). But which of these two stocks is more attractive to value investors?

Sumitomo Mitsui (SMFG) might move higher on growing optimism about its earnings prospects, which is reflected by its upgrade to a Zacks Rank #2 (Buy).

With the banking crisis being a primary concern, we point out that SMFG has quite a lot of foreign bonds which have lost meaningful value. However, we think that deposit flight is not likely in Japan. Moreover, SMFG's business depends on a lot of other things than just loan and deposit businesses.

EBKDY vs. SMFG: Which Stock Is the Better Value Option?

RIO, SMFG and DTEGY made it to the Zacks Rank #1 (Strong Buy) income stocks list on March 21, 2023.

Sumitomo Mitsui (SMFG) has been upgraded to a Zacks Rank #1 (Strong Buy), reflecting growing optimism about the company's earnings prospects. This might drive the stock higher in the near term.

If you are looking for stocks that are well positioned to maintain their recent uptrend, Sumitomo Mitsui (SMFG) could be a great choice. It is one of the several stocks that passed through our "Recent Price Strength" screen.