F3/27 1Q Results: Accelerating Growth in Core Earnings from Non-Resource Areas

Research evidence excerpt

F3/27 1Q Results: Accelerating Growth in Core Earnings from Non-Resource Areas

Update

August 3, 2026 11:40 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MItochu (8001) | Japan Yu Shirakawa

Equity Analyst

F3/27 1Q Results: Accelerating Yu.Shirakawa@morganstanleymufg.com +81 3 6836-5432

Growth in Core Earnings from

Non-Resource Areas

Itochu (8001.T, 8001 JT)

Trading Companies | Japan

AlphaSignals Earnings Reaction Stock Rating Overweight

Industry View In-Line

Unchanged Modest upside Largely unchanged Price target ¥2,400

Impact to our thesis Financial results versus consensus Direction of next 12-month Shr price, close (Aug 3, 2026) ¥1,996

consensus EPS Mkt cap, curr, basic (bn) ¥13,948.4

Source: Company data, Morgan Stanley Research Avg daily trading value (bn) ¥48.4

1Q F3/27 results exceeded consensus: 1Q NP was ¥293.8bn (YoY +3.5%), exceeding

both the consensus estimate of ¥260bn and our forecast of ¥270bn. Relative to our

forecast, Machinery and Energy & Chemicals posted significant upside, helped in

part by one-off gains. On a YoY basis, organic growth expanded by ¥31.5bn (versus

the full-year increase of ¥40bn assumed in the initial plan). Management

commented that businesses such as Descente, North American power operations,

and Tokyo Century have been able to accurately capture customer needs through

hands-on management despite a rapidly changing market environment.

F3/27 NP guidance unchanged: No surprises. Progress toward the company's full-

year NP target of ¥950bn reached 31% in 1Q, representing a strong start to the year.

Core earnings achieved a 38% progress rate against the full-year plan. By segment,

some confirmed one-off gains were reallocated to the Machinery and Energy &

Chemicals segments. The company's ¥40bn buffer remains unused, and given the