Shimizu Corporation (1803): Reiterate Neutral: Building-led growth, but limited val’n appeal; weak civil eng. margin

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Shimizu Corporation (1803): Reiterate Neutral: Building-led growth, but limited val’n appeal; weak civil eng. margin

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Shimizu Corporation (1803)

Reiterate Neutral: Building-led growth, but

limited val’n appeal; weak civil eng. margin

Reiterate Rating: NEUTRAL | PO: 3,000 JPY | Price: 2,461 JPY

13 June 2026

Lower PO to ¥3,000 from ¥3,450; reiterate Neutral Equity

We lift our FY3/27E EPS to ¥194.9 from ¥175.7; however, we lower the PER to 15.5x

from 19.5x to reflect higher uncertainty. The PER implies a c.6% discount to peers and

appears appropriate, reflecting FY3/28-29E EPS growth of 9%, below the peer average. Key Changes

We maintain a Neutral rating, reflecting weaker near-term share buyback expectations (¥) Previous Current

and relatively less attractive earnings growth in FY3/28–FY3/29. Price Obj. 3,450.00 3,000.00

2027E Rev (m) 2,081,916.7 2,302,636.6

Raise FY3/27 and FY3/28 OP estimates by 25% and 18% 2028E Rev (m) 2,132,532.2 2,391,665.6

We lift our FY3/27E operating profit (OP) to ¥156.7bn (+25%, vs. consensus ¥148.0bn), 2029E Rev (m) NA 2,484,935.1

and our FY3/28E to ¥169.3bn (+18%, vs. ¥167.2bn), reflecting higher standalone building 2027E EPS 178.22 194.89

sales and profits. We estimate FY3/29 OP at ¥184.3bn (+8.9% YoY, vs. ¥195.1bn 2028E EPS 160.94 185.37

consensus). While large low-margin projects remain, standalone building margins are 2029E EPS NA 192.38

expected to recover toward recent peak levels, supported by roll-off of unprofitable 2027E Op. Profit (m) 125,438.6 156,688.1

projects and additional works. We assume share buybacks of ¥10bn for FY3/27

(previously ¥40bn) and ¥30bn for FY3/28 (previously ¥20bn), factoring in recent M&A Takumi Kasai >>

and changes in the timing of policy shareholding disposals. Research Analyst