Nomura Research Institute (4307.T): Raise GSe/TP slightly on strong financial modernization/cybersecurity, but rebound in consulting/industrial IT needed for share price turnaround; Buy

Research evidence excerpt

Equity Research

20 August 2026 | 3:31PM JST

Nomura Research Institute (4307.T)

Raise GSe/TP slightly on strong financial modernization/cybersecurity, but rebound in

consulting/industrial IT needed for share price turnaround; Buy

4307.T

12m Price Target: ¥5,800

Price: ¥4,860

Upside: 19.3%

We update our earnings estimates following 1Q3/27 (April-June)

results (see our 1Q results report). While factoring in delays in

consulting orders and narrower margins in industrial IT due to an

increase in new customers, we revise up our estimates for financial

IT, where modernization project demand is strong, and the IT

platform business, where security demand is expanding. With this,

we raise our FY3/28-FY3/29 operating profit estimates by 1% each

(FY3/27 estimate unchanged). Reflecting the upward revision to our

profit estimates, we raise our 12-month target price to ¥5,800 from

¥5,600.

We expect FY3/27 operating profits to beat guidance, led by

financial IT and IT platforms. SI/modernization projects are

robust in financial IT, and demand for cybersecurity-related

services is strong in IT platforms, and we think these trends are

poised to continue. On the other hand, segment performance is

mixed, as consulting orders are soft, mainly in the public sector,

and profitability in industrial IT is down due to an increase in new

customers (margins relatively low as development know-how

not accumulated for new clients).

Equity investors are focused on the weakness in consulting and

industrial IT, and we think a real share price turnaround will

require a recovery in these businesses. We believe consulting

orders will gradually recover in line with industry trends, and

that the decline in industrial IT profitability is temporary factor

accompanying an increase in new customers, and we look for

business in both segments to show a clear recovery from 2H

onward. Over the medium term, we see NRI reaping strong benefits

from growth in AI-related business (security and consulting, and

accompanying modernization) and improved margins fueled by

AI-driven development. We maintain our Buy rating.

BUY

Chikai Tanaka, CFA

Goldman Sachs Japan Co., Ltd.

Yuki Sato

Goldman Sachs Japan Co., Ltd.

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