[Earnings Summary] Trading companies supported by non-resource and weak yen, highlighting Mitsubishi Corporation's monster-level share buyback
The earnings for the third quarter of the fiscal year ending March 2024 (4-12 months, 3Q) have been announced by the five major trading companies. During the previous period affected by the Ukraine war The historic resource high has temporarily declined.and all five companies expectfull-year profit forecastremain unchanged. However, each company is strengthening non-resource sectors such as textiles and food, which are less affected by market conditions, and is prepared for unexpected losses and a continued weak yen, which could be factors contributing to better-than-expected performance for the fiscal year. Trading company stocks continue to rise due to the sense of security in being designated as 'Buffett stocks', and only Sumitomo Corporation (PBR of 0.96) has a PBR below 1.strengthening non-resource sectorsIn addition, they have increased the buffer to prepare for continued weakening of the yen and unexpected impairments, which is likely to contribute to an upward revision for the full-year performance.Buffett stocksfrom Sumitomo Corporation (0.96 times) only, as the PBR (price to book ratio) remains below 1.
Mitsubishi Corporation had a significant impact on its stock price with its 3Q earnings report. On the day after the announcement, the stock temporarily rose by about 11% compared to the previous day. This positive reaction was due to the 3Q net profit exceeding market expectations and the announcement of repurchasing its own shares up to 500 billion yen, which is equivalent to 10% of the total issued shares.500 billion yenAttracted by the news of the company's share buyback, Jefferies Securities commented that it was a "monster-level" share buyback and raised their target stock price from 2,666 yen to 3,200 yen.Also, the company'sannouncement of repurchasing its own shareswas well-received.In their statement, Jefferies Securities referred to it as a "monster-level" share buyback and raised their target stock price from 2,666 yen to 3,200 yen. The company'sIt was also a big surprise for KDDI to conduct a tender offer (TOB) for its consolidated subsidiary Lawson.SMBC Nikko Securities evaluated that removing Lawson with a low ROA (Return on Assets) from the balance sheet could lead to asset efficiency improvement. The comprehensive evaluation by 10 analysts is " bullishThe target stock price at 2,550 to 3,200 yenThe closing price on the 9th was.2,770 yen。
ITOCHU's non-resource businesses such as convenience stores, information, and financial services supported profits. The net profit forecast for this fiscal year is maintained at a 0.1% decrease of 800 billion yen, but CFO Tsuyoshi Hachimura revealed during the earnings call, "We still have a 30 billion yen loss buffer." He also mentioned that the previous year's 800.5 billion yen is expected to be the bottom, indicating the possibility of a turnaround and profit increase."We still have a 30 billion yen loss buffer remaining.""The previous year's 800.5 billion yen is expected to be the bottom," he said, suggesting the possibility of a turnaround and profit increase.There is a possibility of a turnaround and profit increase.Due to higher-than-expected resource prices and continued depreciation of the yen, market expectations are for an increase in profitability for the full year.The Tokai Tokyo Research Center's Senior Analyst, Hideaki Kuribara, expects a profit increase of 8.7% compared to the previous year, reaching 870 billion yen. There was some selling after the announcement, as the Q3 net profit fell below market expectations and there were no additional shareholder return measures. The overall evaluation by nine analysts is "The overall evaluation by nine analysts is "slightly bullish.The target stock price at 6300-7100 yen.The closing price on the 9th was.6572 yen.。
Among the five companies, Mitsui & Co. is the only one that raised its full-year net profit forecast and narrowed the expected decline. This was due to the high iron ore prices and solid production at the Brazilian mines where it holds equity.The metal resources business exceeded expectations.The non-resource ratio for the full year increased to 49%. The overall evaluation by analysts is slightly bullish.'. The target stock price range is 5,490-6,800 yen.The closing price on the 9th was.5,862 yen.。
Although the decline in resource prices, such as nickel, has affected Sumitomo Corporation, profits from non-resource sectors such as transportation and infrastructure have increased by 6%. According to the Nikkei, It is expected that the ratio of non-resource sectors to consolidated net profit for the fiscal year ending in March 2024 will be 78%.Surpassing Itochu Corporation,it will be the highest among the top 5 major companies.It has set a buffer of 50 billion yen in preparation for potential impairment in the full-year forecast, and there is also a high expectation of an upside if unexpected impairment does not occur. The comprehensive evaluation by 10 analysts is "hold'. The target stock price range is 3100-4100 yen.The closing price on the 9th was.3323 yen.。
Marubeni's progress rate in net profit for the full year is high at 83%, with a buffer of 20 billion yen. The comprehensive evaluation by 11 analysts is 'slightly bullish.'. The target stock price range is The price range is 2,350 to 3,030 yen.The average target stock price is 2,696.36 yen.The deviation from the closing price of 2,371 yen on the 9th is about The deviation from the closing price of 2,371 yen on the 9th is about 14％と、It is considered to have the greatest potential for a stock price increase among the 5 companies.。
The stock prices of five companies have risen significantly since last spring in response to the buying announcement by Warren Buffett, a renowned American investor who leads an investment company. $Berkshire Hathaway-A (BRK.A.US)$There are concerns that Mr. Buffett may move to sell as the investment appeal has diminished. According to Bloomberg, Mr. Buffett has invested in trading company stocks for approximately 1,300 billion yen, and the current market value has expanded to about 3,200 billion yen, already increasing the shareholding ratios of various companies such as Mitsubishi Corporation (8.3%), Mitsui & Co. (8.2%), Marubeni Corporation (8.4%), Sumitomo Corporation (8.3%), and Itochu Corporation (7.5%). On the other hand, as of August 2020, Berkshire Hathaway had a 9.9% ownership stake in the five major trading companies.approximately 1.3 trillion yenengaged in investment in trading company stocksapproximately 3.2 trillion yenexpanded the shareholding ratios of various companies to Mitsubishi Corporation (8.3%), Mitsui & Co. (8.2%), Marubeni Corporation (8.4%), Sumitomo Corporation (8.3%), and Itochu Corporation (7.5%)9.9% of the five major trading company stocks by Berkshire Hathaway as of August 2020It has been stated that there is a possibility of increasing purchases until [missing information],It can also be said that there is still room for further purchases.。
-moomoo News Kathy
Source: IR materials from various companies, Nikkei, Bloomberg, moomoo
Source: IR materials from various companies, Nikkei, Bloomberg, moomoo
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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micky38 : I wonder if Mitsubishi Corporation will still improve.
Buffett would be happy that his goal was 3200 yen.
Well, a monster class stock buyback
I hope it continues!
し〜dora : Mitsubishi Corporation has complex materials such as stock buybacks, Buffet stocks, and Lawson TOB