Keio

Research evidence excerpt

Keio

Global Markets Research

17 June 2026Keio

9008.T 9008 JP / EQUITY: JAPAN TRANSPORTATION

We update our earnings forecasts Rating

Remains Neutral

We await updates to medium-term business plan, new information about Target price

Shinjuku south exit development project Remains JPY 750

We keep our Neutral rating, regard stock as fairly priced Closing price JPY 727.7We update our earnings forecasts and reiterate our Neutral rating on Keio. We forecast a 16 June 2026

2% y-y decline in operating profits in 27/3 on the booking of asset retirement obligations

Implied upside +3.1%related to the Shinjuku redevelopment project in the life services segment. Although

guidance does not factor in higher energy costs resulting from the conflict in the Middle

East, we think any such increase in costs can be offset by higher revenues. We forecast

operating profits up 8% in 28/3 on the disappearance of the aforementioned asset

Relative performance chartretirement obligations and increased real estate sales. We make only small adjustments to

our forecasts. We retain our target price of ¥750, which we obtain by multiplying our end-

27/3 BPS forecast by a P/B of around 0.9x. We roll forward the base year for our valuation

methodology from 26/3 and lower our fair-value multiple from around 1.0x previously.

Although we raise our ROE forecast to reflect increased sales of strategic shareholdings,

we also take into account higher cost of capital at railway operators because of inflation

and rising interest rates.

Company reviewing plans for Shinjuku Station south exit redevelopment project;

we will be awaiting the results of the review

Keio is planning to develop real estate at the south exit of Shinjuku Station, a major