Next 3 Months Key for Gauging Longer-term Sustainability of Solid Earnings, Rather Than Strength in Apr-June Results: Transportation Industry Investment Strategy

Research evidence excerpt

Next 3 Months Key for Gauging Longer-term Sustainability of Solid Earnings, Rather Than Strength in Apr-June Results: Transportation Industry Investment Strategy

Japan Insight

July 28, 2026 06:30 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MTransportation Industry Investment Strategy Takuya Osaka

Equity Analyst

Next 3 Months Key for Gauging Takuya.Osaka@morganstanleymufg.comShan Jiang +81 3 6836-5438

Research Associate

Shan.Jiang@morganstanleymufg.com +81 3 6836-5430

Longer-term Sustainability of

Solid Earnings, Rather Than

Strength in Apr-June Results Railways

Japan

For passenger-related domestic industries (railways, airlines, Industry View In-Line

Airlines

tourism), the key risk is weakening demand after summer Japan

Industry View In-Line

season. For shipping, we see risk of the seasonal container Marine Transportation

shipping market upswing peaking out. In logistics, expectations Japan

Industry View Cautious

for event demand should continue to support share prices. Logistics

Key Takeaways Tourism

Transport industry 3-month investment strategy by sub-industry (our industry Industry View In-Line

views, by contrast, are based on a 12-18 month investment horizon). Diversified Services

We do not expect significant surprises from F3/27 1Q results overall. However, Industry View No Rating

we believe the post-earnings period could mark a turning point in the recent

share price uptrend for the bearish sub-industries below.

Bullish: Logistics. Preferred names: Fukuyama, Seino, Senko, Kamigumi.

Bearish: Railways, airlines, tourism, and shipping.

We highlight JR Central, Tokyo Metro, JR West, Japan Airlines, ANA Holdings,

Skymark, Oriental Land, Mitsui O.S.K. Lines, and Kawasaki Kisen.

Key investment themes are margins and gap vs. market expectations: We see