Nitto Denko (6988): Preview: Solid earnings, near-term drivers limited, steady medium-term price upside

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Nitto Denko (6988): Preview: Solid earnings, near-term drivers limited, steady medium-term price upside

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Nitto Denko (6988)

Preview: Solid earnings, near-term drivers

limited, steady medium-term price upside

Reiterate Rating: BUY | PO: 3,700 JPY | Price: 3,322 JPY

24 July 2026

1Q OP likely to beat consensus on solid demand/weak yen Equity

Nitto Denko is scheduled to announce its 1Q FY3/27 results at 16:00 on Tuesday, July

28. Our forecast for 1Q operating profit (OP) is ¥44.0bn (+3% YoY). The Visible Alpha

(VA) consensus stands at ¥44.8bn. Given solid demand from the automotive and Key Changes

smartphone markets, as well as continued yen weakness, there is a high likelihood that (¥) Previous Current

1Q OP will come in above consensus. Given the stock's attractive valuation, we reiterate 2027E EPS 211.15 211.45

our Buy rating. We maintain our PO at ¥3,700. 2028E EPS 231.34 230.60

2029E EPS 245.48 244.75

We believe near term share price upside is limited 2027E EBITDA (m) 273,800 273,900

While we expect solid 1Q earnings, the potential for share price upside following the 2028E EBITDA (m) 299,000 298,500

results announcement is likely to be limited. This view is based on (1) the fact that the 2029E EBITDA (m) 316,000 315,500

company's supply-share of information tapes (including OCA films) for a major

customer's foldable devices, which had been expected to become a key investment Masashi Kubota >>

theme, has not reached the initially anticipated level, and (2) its relatively low earnings Research Analyst

BofAS Japan

exposure to AI-related businesses. There are abundant earnings growth drivers, including +81 3 6225 7138

electrical release sheets for fixing batteries, semiconductor process materials, circuit masashi.kubota@bofa.com