Idemitsu Kosan (5019): Cut PO; strong overseas refining remains the key earnings driver

研报英文原文证据摘录

Idemitsu Kosan (5019): Cut PO; strong overseas refining remains the key earnings driver

Accessible version

Idemitsu Kosan (5019)

Cut PO; strong overseas refining remains

the key earnings driver

Reiterate Rating: BUY | PO: 1,720 JPY | Price: 1,271 JPY

14 July 2026

Cut PO to ¥1,720 from ¥1,850; reiterate Buy Equity

We cut our earnings forecasts and lower our Price Objective (PO), despite improvements

in overseas refining margins and lubricants, due to a weaker outlook for domestic

refining margins, higher crude procurement costs, and increased costs related to new Key Changes

businesses. We apply a 10.5x P/E multiple (previously 10.0x) to our FY3/28 EPS excluding (¥) Previous Current

inventory effects. We raise the valuation multiple underlying the PO to reflect our higher Price Obj. 1,850.00 1,720.00

dividend forecasts, supported by the shareholder-return policy under the new mid-term 2027E Rev (m) 11,753,500.0 9,035,200.0

management plan. We reiterate Buy, given resilient earnings driven by domestic refining 2028E Rev (m) 9,291,800.0 8,026,500.0

and trading operations, investment in growth businesses and an undemanding valuation. 2029E Rev (m) 8,891,700.0 8,145,300.0

2027E EPS 139.24 111.34

Earnings revisions: Stronger overseas performance, 2028E EPS 188.01 163.69

2029E EPS 209.51 187.19weaker domestic outlook

In addition to the factors above, changes in timing-lag effects stemming from lower 2027E EBITDA (m) 381,415.0 375,000.0

crude oil price assumptions (2026: US$93/bbl to US$82/bbl; 2027: US$78/bbl to 2028E EBITDA (m) 414,415.0 448,000.0

US$70/bbl) are a key earnings driver. We revise our forecasts for operating profit plus 2029E EBITDA (m) 454,415.0 478,000.0

equity-method earnings, excluding inventory effects, to ¥210bn from ¥272bn for FY3/27