Kokuyo

Research evidence excerpt

Kokuyo

Global Markets Research

26 June 2026Kokuyo

7984.T 7984 JP / EQUITY: JAPAN RETAILING

RatingWe forecast 26/12 operating profits in line with

Remains Neutralguidance

Target price

We expect steady earnings growth on M&A benefits and overseas Reduced from 900 JPY 800

expansion at stationery segment

Closing price JPY 819.7We retain Neutral rating 25 June 2026

We revise our earnings forecasts and target price for Kokuyo in light of 26/12 Q1 results.

Implied upside -2.4%Operating profits at Kokuyo grew at a CAGR of nearly 14% from 12/12, when the furniture

segment became consistently profitable, through 25/12, and the stock traded in an

adjusted P/E (excluding extraordinary gains/losses) range of 13–24x over this period. We

use a fair-value P/E of just under 17x, a discount of around 10% to the midpoint of this

Relative performance chartrange (18.5x) to reflect the prospect of slower operating profit growth of 5% y-y in 27/12

and 6% in 28/12. Applying this P/E to our 26/12 adjusted EPS forecast of ¥47.2 yields our

target price of ¥800.

Near-term earnings: 26/12 sales guidance looks bullish

We forecast 26/12 sales of ¥379.1bn (up 5% y-y) and operating profits of ¥27.37bn (up

4%). We expect sales to fall short of guidance, which we regard as bullish with respect to

the furniture and business supply distribution segments. Sales at the furniture segment

rose only 6% y-y in 26/12 Q1, and we expect segment sales to fall short of guidance on

the prospect of weak performance at existing overseas businesses from Q2 onwards, net

of contributions from M&A. Elsewhere, we expect sales at the business supply distribution

segment to register a double-digit y-y decline in 26/12 Q4 on the disappearance of one-