F3/27 1Q Results: US Steel Drives Earnings

Research evidence excerpt

F3/27 1Q Results: US Steel Drives Earnings

Update

August 4, 2026 12:39 PM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MNippon Steel (5401) | Japan Yu Shirakawa

Equity Analyst

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

Drives Earnings

AlphaSignals Earnings Reaction

Nippon Steel (5401.T, 5401 JT)

Unchanged In-line Modest revision higher Steel | Japan

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS Stock Rating Overweight

Industry View Cautious

Source: Company data, Morgan Stanley Research Price target ¥720

Shr price, close (Aug 4, 2026) ¥646

F3/27 1Q results slightly below our forecasts: Nippon Steel reported F3/27 1Q Mkt cap, curr, basic (bn) ¥3,865.1

Avg daily trading value (bn) ¥25.2

business profit of ¥145.5bn, falling somewhat short of our ¥157.5bn forecast.

Underlying business profit, excluding inventory valuation, etc, was -38% YoY to

¥108.4bn. The negative impact from the situation in the Middle East amounted to

about -¥25bn.

Upward revisions to F3/27 full-year guidance: The company raised its full-year

business profit guidance from ¥530bn to ¥630bn. Guidance for underlying business

profit was unchanged at ¥700bn. The change to business profit guidance includes -

¥90bn from domestic business, offset by +¥90bn from overseas business, +¥70bn

from inventory valuation, and +¥30bn from non-operating income/consolidation

effects/etc. The company's revised guidance factors in a negative impact of -¥60bn

from the Middle East situation. In overseas business, the expected profit

contribution from US Steel was raised by a total of ¥80bn against a backdrop of

rising prices and earnings improvement initiatives. Meanwhile, the company's