Wait-and-see stance ahead of new business plan

Research evidence excerpt

Wait-and-see stance ahead of new business plan

Global Markets Research

17 June 2026Tokyu

9005.T 9005 JP / EQUITY: JAPAN TRANSPORTATION

RatingWait-and-see stance ahead of new business plan Remains Neutral

Target price JPY 1,800Modest profit growth in absence of major developments, we await new Remains

business plan

Closing price JPY 1,694.0We keep our Neutral rating, regard stock as fairly priced 16 June 2026

We retain our Neutral rating on Tokyu, having updated our earnings forecasts. The

Implied upside +6.3%company has been proactively redeveloping its properties in Shibuya, and we expect

these developments to contribute to profits over the long term. However, we envision only

modest medium-term profit growth because of a lack of proactive real estate turnover

operations. We fine-tune our earnings forecasts and retain our target price of ¥1,800. We

Relative performance chartcalculate our target price by applying a P/B of 1.0–1.1x to our end-27/3 BPS forecast

(previously around 1.2x to our end-26/3 BPS forecast). While we make no major changes

to our ROE forecasts, we take into account that cost of capital at railway operators has

been increasing as a result of rising interest rates and inflation.

We forecast 27/3 operating profits of ¥108.9bn, slightly below guidance

The company is guiding for 27/3 operating profits of ¥110.0bn, or ¥95.5bn (up ¥6.6bn y-y)

excluding gains on the sale of real estate. This reflects rent revisions for rental real estate

and profit growth at the retail segment in particular, in line with the internal growth targets

in the current medium-term business plan. However, guidance for profit growth at the retail

and transportation segments strikes us as bullish given cost increases caused by inflation,