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On Thursday, Jefferies analyst Sho Fukuhara upgraded IHI Corp. shares from Hold to Buy, significantly increasing the price target to JPY13,800 from JPY7,800. The upgrade was based on the firm’s positive outlook for the company’s consistent earnings growth through the fiscal year ending March 2027, despite potential economic risks. The optimism appears well-founded, as InvestingPro data shows IHI has delivered an impressive 241.94% return over the past year, with revenue growth of 26.13% in the last twelve months.
Fukuhara’s optimism stems from IHI’s recent strategic moves, including the divestiture of non-core businesses over the previous six months. These actions have bolstered confidence in the company’s ability to sustain medium-term enterprise value creation. The analyst’s application of a historically high price-to-book (P/B) ratio on the forecast for the fiscal year ending March 2027 supports the new price target. Currently trading at a P/B ratio of 3.82 and a P/E of 14.56, the $12.09 billion market cap company maintains a "GOOD" financial health score according to InvestingPro analysis.
The revised price target by Jefferies suggests that IHI Corp. shares have a potential upside of over 20%. This projection is accompanied by expectations of a further market re-rating for the company. The analyst’s commentary indicates a belief that IHI’s strategic decisions will positively influence its financial performance and stock valuation in the medium term.
IHI Corp., listed on the Tokyo Stock Exchange as 7013:JP and on the OTC market as IHICY, is poised to experience growth according to Jefferies’ analysis. This growth is anticipated despite the economic uncertainties that may affect the broader market.
The report by Jefferies provides investors with a revised outlook on IHI Corp., reflecting the firm’s confidence in the company’s future performance. The new Buy rating and increased price target underscore the analyst’s view that IHI Corp. is on a trajectory for consistent earnings growth and enhanced enterprise value.
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