Trump announces trade deal with EU following months of negotiations
On Thursday, Goldman Sachs revised its stance on Nomura Research Institute Ltd. (4307:JP) (OTC: NRILY), a prominent IT services provider with a $20.13 billion market capitalization, downgrading the company’s stock rating from Buy to Neutral, while maintaining a price target of JPY 5,300.00. The decision follows an assessment of Nomura Research Institute’s third-quarter earnings for the fiscal year ending in March 2025. According to InvestingPro data, the company maintains a "GOOD" financial health score, with liquid assets comfortably exceeding short-term obligations.
Chikai Tanaka, an analyst at Goldman Sachs, cited a potential slowdown in the recovery of demand from retail customers and in markets such as Australia and North America as the reason for lowering profit forecasts for the company’s industrial IT solutions. Despite this, the firm’s overall operating profit estimates for fiscal years 2025 to 2027 remain unchanged, buoyed by stronger-than-expected demand for consulting, financial IT solutions, and IT platform services, primarily in Japan. The company has demonstrated steady performance with a 3.95% revenue growth and maintains healthy profitability metrics, including a 36% gross margin.
The unchanged 12-month price target of JPY 5,300 is based on a projected price-to-earnings ratio of 30 times for the fiscal year 2026. Tanaka noted that Nomura Research Institute’s share price has seen a positive trend since the beginning of 2025, driven by factors such as the faster-than-expected acquisition of new domestic customers in the industrial IT solutions sector.
However, with the share price now approaching the target, Goldman Sachs sees limited room for further growth, prompting the downgrade to a Neutral rating. The firm’s analysis indicates only about a 1% potential upside to the current target price, suggesting that the stock’s significant growth prospects may have plateaued for now.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.