East Japan Railway (9020): 1Q results: Good start, mainly due to railway revenue; management taking cautious approach

Research evidence excerpt

East Japan Railway (9020): 1Q results: Good start, mainly due to railway revenue; management taking cautious approach

J P M O R G A N Asia Pacific Equity Research

31 July 2026

East Japan Railway (9020) Neutral

9020.T, 9020 JP

1Q results: Good start, mainly due to railway revenue; Price (31 Jul 26):¥3,676

management taking cautious approach Price Target (Dec-26):¥4,100

Neutral: 1Q operating profit grew 9.4% YoY to ¥125.5 billion (our estimate: Japan Equity Research

¥130.5 billion; Bloomberg consensus estimate: ¥124.4 billion). Progress was

Transportation (Land, Sea, Air), OTC

ahead of guidance, mainly due to railway revenue, but management left full-year & Small Companies, Real Estate &

guidance unchanged, including growth of 3.6% YoY to ¥429.0 billion in operating REITs

profit (our estimate: ¥436.7 billion; Bloomberg consensus estimate: ¥449.9 AC Ryota Himeno

billion) and dividends per share of ¥84. The company apparently intends to (81-3) 6736-8639

monitor demand trends following fare revisions a little longer and may also ryota.himeno@jpmorgan.com

consider front-loading expense recognition in the event of higher-than-expected JPMorgan Securities Japan Co., Ltd.

sales, but we think progress raises the prospect of an upward revision at 1H results.

The returns policy comprises a phased increase in the dividend payout ratio to 40%

by FY2027 and flexible share buybacks.

• Results summary: By segment, 1Q operating profit grew ¥16.0 billion YoY

to ¥83.8 billion in transportation (full-year guidance: +¥12.6 billion to ¥207.0

billion) and ¥1.0 billion to ¥15.3 billion in retail & services (+¥1.9 billion to

¥70.0 billion), but fell ¥9.3 billion to ¥19.0 billion in real estate & hotels (+¥2.7

billion to ¥131.0 billion). Within real estate, operating profit on real estate sales