Central Japan Railway "Risk-reward balance looks attractive" (Buy) Isogai

研报英文原文证据摘录

Central Japan Railway "Risk-reward balance looks attractive" (Buy) Isogai

Global Research

13 May 2026ab

Central Japan Railway Equities

JapanRisk-reward balance looks attractive

Railroads

12-month rating Buy

Excessive decline in share price

Central Japan Railway’s (JR Central) shares have fallen by as much as 10% in the wake of 12m price target ¥4,600

its results announcement. In our view, this reflects investor concerns over (1) the Prior : ¥5,000

pullback in demand after the Kansai Expo, and (2) cost guidance for FY3/27. However,

Price (13 May 2026) ¥3,641

despite including around half a month of the post-Expo pullback, Shinkansen passenger

numbers were solid in April, rising 3% yoy. On the cost front, we see a high likelihood RIC: 9022.T BBG: 9022 JP

that costs will be lower than expected because the company tends to formulate

Trading data and key metrics

conservative cost plans. Moreover, the stock is trading at a FY3/27E PER of 7X, near the

52-wk range ¥4,805-3,016

historical bottom, a strong sign of undervaluation. Although we are lowering our

earnings estimates and price target in light of guidance, we reiterate our Buy rating. Market cap. ¥3,478b/US$22.0b

Shares o/s 955m (ORD)

Pullback from Expo-related special demand can be cushioned Free float 87%

Investors appear to be rather concerned about the pullback in demand after the Kansai Avg. daily volume ('000) 2,769

Expo, which was held during April-October 2025. However, we believe that the Avg. daily value (m) ¥11,599.7

dropping out of Expo-related special demand can be cushioned by growth in underlying Common s/h equity (03/27E) ¥5513b

demand. This is because Expo-related special demand accounted for only around 3% P/BV (03/27E) 0.6x

(about ¥46bn) of Shinkansen revenue, and Shinkansen demand has been robust.