TIS (3626): Raise price objective; reiterate Neutral on limited growth expectations

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TIS (3626): Raise price objective; reiterate Neutral on limited growth expectations

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TIS (3626)

Raise price objective; reiterate Neutral on

limited growth expectations

Reiterate Rating: NEUTRAL | PO: 4,100 JPY | Price: 3,472 JPY

Raise price objective to ¥4,100; reiterate Neutral 20 May 2026

We revise up our operating profit forecast, mainly reflecting higher revenue assumptions Equity

on the back of firm order trends, and raise our price objective to ¥4,100 (from ¥3,900),

with the applied P/E for FY3/28 unchanged at 15x. While we raise our price objective, we

Key Changesreiterate Neutral rating due to limited earnings growth expectations in the near term.

We forecast the company’s operating profit will deliver a CAGR of 6% over the three (¥) Previous Current

years through FY3/29, implying relatively low earnings growth within the sector. Price Obj. 3,900.00 4,100.00

2027E Rev (m) 608,000.0 621,000.0

2028E Rev (m) 630,000.0 641,000.0Reasons for modest near-term earnings growth

We see three key factors underpinning our view: (1) key customers are in an investment 2029E Rev (m) NA 656,000.0

lull; (2) the pace of gross margin improvement has stalled; and (3) ¥1.6bn merger-related 2027E EPS 230.70 265.18

costs associated with planned merger with consolidated subsidiary INTEC in July 2026. 2028E EPS 257.92 275.38

2029E EPS NA 294.29

Key points to watch 2027E EBITDA (m) 95,500.0 101,000.0

We will monitor outcomes from the reseller agreement with Anthropic and progress in 2028E EBITDA (m) 102,000.0 106,500.0

AI-driven development initiatives. In particular, we look for signs that AI adoption could 2029E EBITDA (m) NA 111,000.0

accelerate the pace of gross margin improvement and strengthen earnings growth 2027E DPS 77.00 90.00

expectations over time.