Expecting earnings to be impacted by sharp rise in prices for inputs in the near term

Research evidence excerpt

Expecting earnings to be impacted by sharp rise in prices for inputs in the near term

Global Markets Research

10 July 2026Zojirushi

7965.T 7965 JP / EQUITY: JAPAN CONSUMER ELECTRONICS

RatingExpecting earnings to be impacted by sharp rise

Remains Neutralin prices for inputs in the near term

Target price

We still look for growth in Asia and increased sales of combination Reduced from 1,850 JPY 1,600

microwave ovens in Japan over the medium term

Closing price

We keep our Neutral rating, forecast medium-term growth driven by cooking 9 July 2026 JPY 1,403

appliances

Margins at Zojirushi have been improving owing to sustained cost pass-throughs and increased Implied upside +14.0%

sales of high value-added products such as top-end Embudaki rice cookers. Cost increases

and the sluggish state of the Chinese market constitute headwinds, but the company has also

been working to strengthen its operations in Asia, for example by establishing a sales

subsidiary in South Korea. We expect profit growth over the medium term as it leverages its Relative performance chart

brand appeal and product planning capabilities to boost margins on cooking appliances and

increase overseas sales. We roll forward the base year of our target price calculation and

obtain our target price of ¥1,600 by multiplying our 27/11 EPS forecast of ¥89.7 by a fair-value

P/E of around 18x. We now use a fair-value P/E in line with the Russell/Nomura Large Cap (ex

financials) average (previously we applied a roughly 10% premium to this benchmark), as we

take into account the risk of margin deterioration due to soaring input costs.

We lower 26/11 forecasts on sharp rise in input costs and weaker-than-expected Q2

results

We lower our 26/11 operating profit forecast from ¥7.9bn to ¥7.0bn (down 6% y-y) versus