Cosmo Energy Holdings (5021): Cut PO; weaker oil price outlook and higher imported product costs weigh on earning

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Cosmo Energy Holdings (5021): Cut PO; weaker oil price outlook and higher imported product costs weigh on earning

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Cosmo Energy Holdings (5021)

Cut PO; weaker oil price outlook and higher

imported product costs weigh on earning

Reiterate Rating: NEUTRAL | PO: 4,000 JPY | Price: 3,904 JPY

14 July 2026

Lower PO to ¥4,000 from ¥4,850; reiterate Neutral Equity

We lower our earnings estimates and cut our PO to ¥4,000 from ¥4,850, reflecting lower

crude oil price assumptions (2026: from US$93/bbl to US$82/bbl and 2027: from

US$78/bbl to US$70/bbl) and a weaker outlook for domestic refining margins. As before, Key Changes

our PO is based on 9.5x FY3/28 EPS excluding inventory effects. We reiterate Neutral, as (¥) Previous Current

we see limited upside potential from the petrochemical and upstream oil businesses, Price Obj. 4,850.00 4,000.00

while the high dividend yield should continue to provide support to the share price. 2027E Rev (m) 3,713,400.0 2,803,000.0

2028E Rev (m) 2,914,400.0 2,487,200.0

Cut estimates: Lower oil prices, weaker domestic margins 2029E Rev (m) 2,789,000.0 2,545,000.0

In addition to the negative factors discussed above, higher import costs for refined 2027E EPS 875.85 328.77

petroleum products are expected to weigh on earnings. On the other hand, improved 2028E EPS 304.05 321.98

profitability in jet fuel is likely to provide a meaningful offset. We now estimate 2029E EPS 599.12 492.89

recurring profit excl. inventory effects of ¥103bn (was ¥143bn) for FY3/27 and ¥133bn 2027E EBITDA (m) 205,000.0 161,400.0

(was ¥200bn) for FY3/28. We estimate 1Q recurring profit excl. inventory effects at ¥57bn. 2028E EBITDA (m) 265,000.0 194,400.0

We expect guidance to remain unchanged and do not anticipate any major surprises.