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Investing.com - JPMorgan has initiated coverage on Sumitomo Corp. (TYO:8053) (OTC:SSUMF) with a Neutral rating and a price target of JPY4,820.00.
The rating is based on JPMorgan’s FY2025 BPS estimate and a theoretical P/B of 1.15x, calculated using a medium-term ROE forecast of 11.6% and cost of equity of 10.1%.
JPMorgan notes that since President Shingo Ueno’s appointment in FY2024, Sumitomo has made a stronger push for growth, but the firm would need to see clearer strategic differentiation and faster business execution to turn bullish on the shares.
The investment bank forecasts JPY600 billion in net profit for FY2026, below Sumitomo’s target of JPY650 billion, even including profit contributions from Air Lease, the major US aircraft leasing company Sumitomo acquired in late August.
JPMorgan estimates Sumitomo invested around JPY300 billion for its stake in Air Lease as part of a consortium, which should add JPY12-13 billion to profit from FY2026, while warning that additional capital outlays for the Madagascar nickel project would likely weigh on the shares.
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