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Investing.com - JPMorgan has initiated coverage on Sojitz Corp (TYO:2768) with a Neutral rating and a price target of JPY4,320.00, targeting end-December 2026.
The investment bank notes that Sojitz is the only one among the seven major trading companies trading at a discount below book value, with the price target based on JPMorgan’s FY2025 BPS estimate and a theoretical P/B of 0.89x.
JPMorgan calculates this valuation using a medium-term ROE forecast of 11.5% and cost of equity of 13.0%, reflecting what it sees as Sojitz’s smaller size versus sector peers and incomplete execution of differentiation strategies.
The firm points out that Sojitz’s net profit has remained flat at around JPY110 billion from FY2021 to FY2025, but suggests valuations might improve if profit growth accelerates from FY2026 and the company’s growth story becomes more clearly defined.
According to JPMorgan, Sojitz needs to strengthen its existing business earnings base and develop new revenue-generating clusters to supplement its ESCO (energy conservation service) business in the US and Australia.
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