East Japan Railway

Research evidence excerpt

East Japan Railway

Global Markets Research

31 July 2026East Japan Railway

9020.T 9020 JP / EQUITY: JAPAN TRANSPORTATION

Rating27/3 Q1 results befit status as core railway stock Remains Buy

Target price JPY 4,70027/3 revenues and operating profits on track to beat guidance and hit our Remains

forecasts

Closing price JPY 3,676We reiterate Buy rating on solid earnings 31 July 2026

We reiterate our Buy rating on East Japan Railway, which announced 27/3 Q1 results

Implied upside +27.9%after the close on 31 July, followed by a briefing at 16:55 JST. We identify the following

main points. (1) Q1 railway revenues rose 9% y-y, beating management's assumption of a

5% rise (we estimate outperformance of around ¥16bn), while costs were in line with

guidance. (2) The fare revisions that the company implemented caused some customers

Relative performance chartto transfer to other companies' services, but this was outweighed by strong transportation

demand. (3) Management said that if revenues continue to exceed its expectations it will

use the proceeds to improve services on lines where it competes with rivals. We forecast

full-year 27/3 operating profits of ¥453.1bn, ahead of guidance. We think this is achievable

even if the company increases spending to some extent on the back of strong revenues.

We retain our target price of ¥4,700, which we obtain using a P/E of 18–19x our 27/3 EPS

forecast, in line with the Russell/Nomura Large Cap (ex financials) average.

Strong transportation demand despite fare revisions in 27/3 Q1

East Japan Railway reported a ¥38.1bn y-y rise in railway transportation revenues in 27/3

Q1, breaking down as an increase of ¥20.0bn from fare revisions, a decline of ¥3.0bn from

typhoons and other weather events, and the remainder from increased ridership.