INPEX (1605): Upgrade rating to Neutral; valuation premium has dissipated

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INPEX (1605): Upgrade rating to Neutral; valuation premium has dissipated

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INPEX (1605)

Upgrade rating to Neutral; valuation

premium has dissipated

Rating Change: NEUTRAL | PO: 3,800 JPY | Price: 3,648 JPY

04 June 2026

Upgrade to Neutral; valuation premium has dissipated Equity

While we make only minor changes to our EPS forecasts for FY12/27 and FY12/28, the

stock’s valuation premium has dissipated following the recent share price decline.

Accordingly, we upgrade our rating to Neutral from Underperform, while we lower our Key Changes

price objective (PO) to ¥3,800 from ¥4,250. The PO-basis P/E multiple on our FY12/27 (¥) Previous Current

EPS is now 8x (was 9x), reflecting a modest deterioration in the medium-term earnings Inv. Opinion B-3-7 B-2-7

trend, including downward revisions to profit attributable to owners of the parent from Inv. Rating UNDERPERFORM NEUTRAL

FY12/27 onward owing to rising labor costs at the Ichthys LNG project, as well as a Price Obj. 4,250.00 3,800.00

broader de-rating of sector valuations. The investment rationale for our Neutral rating is, 2026E Rev (m) 2,062,800.0 2,568,400.0

while we expect equity volume expansion over the medium to long term and proactive 2027E Rev (m) 2,580,900.0 2,573,000.0

shareholder returns should support the share price, we forecast earnings to come in 2028E Rev (m) 2,305,800.0 2,301,300.0

below consensus through FY12/28. 2026E EPS 368.40 445.16

2027E EPS 471.44 474.60

Revise estimates: Strong recent performance but rising 2028E EPS 376.43 376.42

2026E EBITDA (m) 1,776,000.0 1,856,000.0labor costs to weigh from next year onward

Owing to a smaller-than-expected impact from Middle East production cuts and a larger- 2027E EBITDA (m) 2,157,000.0 1,941,000.0