Nomura Holdings Upgrade and Outlook
Bank of America (BofA) Securities upgraded Nomura Holdings Inc (TYO:8604) to Buy from Neutral and raised its price objective to ¥1,650, up from the prior target of ¥1,490. The upgrade was justified by a more sustainable return‑on‑equity (ROE) profile and improving earnings quality, underpinned by steady growth in the wealth‑management and investment‑banking segments.
BofA forecasts that Nomura will report first‑quarter net profit of ¥108.2 billion, a sharp increase from the previous quarter. The profit boost is attributed to a recovery in equity‑method income, higher trading revenue, and the absence of several one‑off charges that had depressed fourth‑quarter results.
The broker highlighted confidence that Nomura can sustain an underlying ROE of around 11 %, which it believes justifies a higher valuation multiple. BofA estimates an annualised first‑quarter ROE of 11.6 %, or 10.8 % when one‑off gains are excluded, marking the third consecutive quarter where adjusted ROE hovers near the 11 % level.
In addition to the earnings upgrade, BofA raised its earnings‑per‑share forecasts for fiscal years 2027 through 2029, reflecting expectations of stronger trading and asset‑management revenue.
If the first‑quarter earnings meet BofA’s expectations, the brokerage projects that Nomura’s first‑half dividend could reach ¥31 per share, delivering a dividend yield that remains attractive relative to many insurance peers despite the stock’s recent rally. The broker also anticipates that Nomura will announce another share buyback later in the fiscal year, though not concurrently with the first‑quarter results.
Reporting by Roushni Nair.