Raising our profit forecasts, mainly for the US

研报英文原文证据摘录

Raising our profit forecasts, mainly for the US

Global Markets Research

7 July 2026Nippon Steel

5401.T 5401 JP / EQUITY: JAPAN STEEL, NONFERROUS METALS, WIRE & CABLE

RatingRaising our profit forecasts, mainly for the US Remains Buy

Target price

Tough market conditions in Asia, but impact of Middle East conflict likely Reduced from 740 JPY 720

to ease

Closing price

We reiterate Buy rating, expect investors to gradually price in growth potential of 6 July 2026 JPY 559.0

US business

We raise our near-term forecasts for underlying profits and business profits at Nippon Implied upside +28.8%

Steel, as we expect earnings at US Steel to recover on rising in US steel prices and

acquisition synergies, and we also expect a smaller hit to earnings from the situation in the

Middle East than we had previously assumed. We think stock market participants remain

skeptical about the recovery in US operations, partly because of underlying losses at US Relative performance chart

Steel in 26/3. However, we still see plenty of upside for the share price, as we expect 27/3

Q1 results to provide evidence of a recovery in earnings at US Steel and we also expect

investors to gradually take a more favorable view of medium-term growth prospects for

overseas operations as earnings subsequently expand. We trim our target price, having

lowered the fair-value EV/EBITDA we apply from 8.5x to 7.5x because the average

EV/EBITDA on 27/3 forecasts for the steel sector companies under our coverage has

fallen since the last time we reviewed our forecasts and the gap in medium-term EBITDA

growth between Nippon Steel and the industry average has narrowed too.

27/3: Raising our forecasts for overseas operations and group steel companies